JD Sports Fashion, a London-listed fashion retailer, has revised its projection for fiscal 2024 headline pretax profit following lower-than-expected revenue growth in the 22-week period leading up to December 30th.
Revenue Growth Falls Short of Expectations
In this period, organic revenue growth on a constant-currency basis stood at 6%, with like-for-like growth at 1.8%, slightly below their initial expectations. The company highlighted that apparel revenue growth was impacted by milder weather conditions starting in the second half of September. Furthermore, the peak trading season saw softer and more promotional market conditions, indicating a more cautious approach from consumers when it came to spending.
Gross Margin Rate Below Anticipated Level
During the peak trading period, JD Sports Fashion experienced a lower gross margin rate than initially projected. This was primarily due to an elevated level of promotional activity in the market.
Revised Profit Estimates
As a result of these factors, JD Sports Fashion has downgraded its headline pretax profit estimates for fiscal 2024 to a range of £915 million to £935 million ($1.16 billion to $1.18 billion). This is a decrease from their previous estimate of £1.04 billion.
Looking ahead, JD Sports Fashion expects organic revenue growth for the full year to be around 8%.