JD Sports' Holiday Sales Hurt by Market Promotions

As the holiday season comes to a close, JD Sports Fashion Plc (LON: JD.) has revised its profit forecast downward, citing higher-than-anticipated market headwinds during the period. The sportswear giant revealed in its latest trading update that it now expects full-year profit before tax and adjusting items to be between £915 million and £935 million, down from its previous estimate of £955 million to £1.035 billion. Despite organic revenue growth of 3.4% for the nine weeks to 4 January 2025, the company noted a challenging retail environment, with increased promotional activity impacting overall performance.



Like-for-like (LFL) revenue across November and December were down 1.5%, although JD said a strong Christmas trading period saw December LFL revenue increase by 1.5%. CEO Régis Schultz commented, "While I am pleased overall with our performance, market headwinds were higher than we anticipated and therefore our full-year profit forecast is slightly below our previous guidance. With these trading conditions expected to continue, we are taking a cautious view of the new financial year."

The company said footwear sales outperformed apparel, and the company's stores saw stronger performance compared to its online channel. The Sporting Goods and Outdoor segment, along with markets in Europe and Asia Pacific, showed positive LFL revenue growth, partially offsetting weaker performance in the UK and North America.



JD Sports shares have been under pressure recently, declining more than 35% over the past three months. So far on Tuesday, the stock is down 10%, continuing the recent move lower in the stock. Over the past 12 months, JD shares have dropped 24%, reflecting ongoing challenges in the retail sector.

The news caused a dip in the retailer's stock, with shares for JD Sports down over 5% as of Tuesday afternoon. Watch on FN

Considering the current headwinds in the market, we performed well, delivering organic revenue growth of 3.4 percent across the period, and a strong Christmas resulted in like-for-like revenue growth in December," Schultz said. Despite the dip in sales during the period, JD Sports said that it delivered record Black Friday week sales of over 300 million pounds with like-for-like sales up 14 percent. The company noted that it also saw its "best-ever" Christmas week sales of more than 400 million pounds with sales up 28 percent.



Interestingly, JD Sports noted that it sold more than 2 million pairs of Nike Air Force 1s and Nike Dunks in North America across the period and had its "best-ever" sales day in the company's Macy's concessions in North America of over $36 million.

Looking ahead, the retailer now expects its full-year profit before tax and adjusting items to be between 915 million pounds and 935 million pounds. This update is down from the guidance JD Sports gave in November which forecasted profit before tax and adjusting items to be between 955 million pounds and 1.035 billion pounds. JD Sports is expected to provide a full fourth quarter trading update and provide guidance for fiscal year 2026 in March.

In conclusion, JD Sports' holiday sales were impacted by increased promotional activity across the market, leading to a revision in the company's profit forecast. Despite strong footwear sales and a robust Christmas trading period, the retailer's shares have been under pressure, reflecting ongoing challenges in the retail sector. As JD Sports looks ahead to the new financial year, it is taking a cautious view of the trading conditions expected to continue.