Sportswear retailer JD Sports Fashion has today lowered its full-year profit forecast, citing higher costs and subdued consumer spending that hurt peak season demand.
Retailers in the UK have experienced tepid growth as the ongoing cost-of-living squeeze prompts shoppers to rein in spending.
Softer demand and more promotional activity than expected also dented gross margins in the peak 22-week period ended December 30, JD noted, adding that its full-year gross margin rate will be slightly lower than last year.
Apparel revenue growth was also impacted by milder weather conditions, JD said.
The company, which sells Nike, Adidas and other sports fashion ranges, now expects profit before tax and adjusted items of £915-935m for the year ending February 3.
That is down from a previous expected profit in line with market expectations at around £1.04 billion.
"The consumer is cautious and looking for a deal and with no especially exciting launches, it has been a dullish period," Peel Hunt analysts said in a note.
Late last month, Nike trimmed its annual sales forecast blaming cautious consumer spending, a weaker online business and more promotions.
JD Sports said its like-for-like organic revenue increased 1.8%, slightly less than expected, for the 22 weeks ended December 30.
The UK's biggest sportswear retailer expects full-year organic revenue growth of about 8%.
"Our key markets have seen increased promotional activity during the peak trading season, driven by a more cautious consumer, but we continue to grow market share," CEO Régis Schultz said in a statement.
In contrast, British clothing retailer Next today raised its profit forecast for the year to the end of January 2024 for the fifth time in eight months on better-than-expected full-price sales.
