Britain’s biggest sportswear retailer JD Sports struck a cautious tone on Thursday amid concerns inflation could push up costs and as strikes at ports add to supply chain challenges.
The company’s comments come amid soaring energy and other costs in Britain, with fashion retailers Primark and Asos and online grocer Ocado Retail all warning about profits.
JD Sports chief financial officer Neil Greenhalgh told Reuters that, as its products are mostly shipped from Asia, the industrial action at ports in Felixstowe and Liverpool, among others, had aggravated supply chain problems.
JD, which sells global brands including Nike, Adidas and Reebok as well as private labels such as Pink Soda and Supply & Demand, said sales in the UK, mainly online, softened in August and early September as customers were slow to take up heavier autumn products such as sweatshirts and tracksuits while the weather remained relatively warm.
Greenhalgh said cheaper private label items were likely to do better than other brands and clothing range “Technicals” was the best performer in that segment.
JD, which has over 900 stores worldwide, said sales so far in the second half of its financial year were up 8 percent year-on-year. It reiterated its forecast that profit for the year to Jan. 28, 2023 would be in line with the record performance a year earlier.
Shares in the FTSE 100 company fell as much as 8 percent to 113.95 pence, their lowest in three weeks, before paring losses to trade 4 percent lower as of 08:30 GMT. They were still the top percentage loser on the blue-chip index.
Pretax profit fell 18 percent to £298.3 million ($335.3 million) for the six months ended July 30, while revenue climbed 14 percent to £4.42 billion.
By Aby Jose Koilparambil; Editors: Devika Syamnath and Mark Potter
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