JD Sports Fashion Plc slashed its profit forecast as it blamed unseasonable weather and cautious consumer spending for weak sales during the crucial period leading up to Christmas.
The British sportswear retailer now sees pretax profit for the full year between £915 million ($1.16 billion) and £935 million, down from £1.04 billion previously.
Shares fell 20 percent in early trading in London, and the profit warning also dragged down the stocks of other sportswear makers and retailers.
Clothing sales took a hit from milder weather from late September, JD Sports said. Like-for-like sales growth was 1.8 percent for the 22 weeks to Dec. 30, according to a trading update Thursday.
Margins will be smaller than last year due to special offers and promotions used to attract shoppers during its peak trading period, the update added.
Nike Inc. revealed cost-cutting plans last month due to poor sales, sending its shares — and those in other sportswear companies — tumbling. On Thursday, shares in Adidas AG fell 3 percent in Germany, while Puma SE was also trading lower. In London, Frasers Group Plc, which owns Sports Direct, was down more than 2 percent.
Some European fashion retailers have also blamed mild weather for weaker revenues. Zara-owner Inditex SA, British clothes store Superdry Plc and boot-maker Dr Martens Plc delayed their winter collections as unseasonably high temperatures persisted in Europe into September and October.
However, other retailers are still performing well. Next Plc raised its profit expectations again Thursday morning following strong festive trading.
JD Sports’ downgrade was called “disappointing” by Investec analyst Kate Calvert, though she said the retailer is still capable of growing strongly and has “substantial longer term opportunities.”
By Maggie Shiltagh and Chloé Meley
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