JD Sports shares slide 23% as Christmas sales come up short 

The sports retailer now expects profit before tax of £915m to £935m for the financial year, down from a previous forecast of over £1bn.

Nearly £2bn (€2.3bn) was wiped off JD Sports Fashion's market value, after the sportswear giant warned on annual profit, citing tepid consumer spending that bruised Christmas peak season sales and led to heavy discounting.

The retailer, which sells Nike, Adidas and other sports fashion ranges, said softer demand and more promotional activity than expected dented gross margins in the peak 22-week  period through to the end of December. 

It now expects profit before tax of £915m to £935m for the year ending at the start of February, down from a previous forecast of over £1bn. 

Shares in the company, which along with fashion retailer Next was among the first non-food retailers to issue a post-Christmas trading updates, recorded its steepest fall of 23%. The shares had gained about 25% since its half-year results announcement up to year-end, as investors bet on the group's expansion across North America and Europe.

JD's warning echoes similar statements from Adidas and Puma, which have been grappling with staggered apparel sales amid warmer weather, while footwear demand has remained steady. 

Clothes retailers like H&M and Superdry also flagged a slower start to the autumn-winter season as shoppers held off buying knitwear, but Next has reported it had a strong Christmas sales period.

Last month, Nike trimmed its annual sales forecast, blaming cautious consumer spending, a weaker online business and more promotions.

Shares of sportswear firms Nike, Adidas, Puma, and others were down on Thursday.

"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.

JD said its like-for-like organic revenue increased 1.8%, slightly less than expected, for the reported period. The group expects full-year organic revenue growth of about 8%, compared with the 12% growth it posted last year. 

Meanwhile, JD Sports' Dutch subsidiary Sports Unlimited has been declared bankrupt, Dutch media outlet RTL reported, citing a spokesperson of the Amsterdam District Court.

There are 54 stores under Sports Unlimited in the Netherlands, with 1,100 employees. It is not clear if the jobs will be lost. 

"We appreciate this is a difficult time for SUR colleagues in the Netherlands and we are doing our utmost to support them," the spokesperson for Sports Unlimited Retail said in a statement. 

• Reuters