Shares of UK-based JD Sports Fashion PLC (GB:JD) plummeted today after the retailer issued a profit warning for Fiscal 2025. The company now expects its adjusted pretax profit to fall at the lower end of its forecast range of £955 million and £1.035 billion for FY25. This also contrasts with market expectations of an adjusted pretax profit of £965.5 million for the same period. Following the update, JD Sports’ shares fell by almost 14% at the time of writing. Year-to-date, the stock has dropped by 39%.
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JD Sports Fashion specializes in branded sportswear and fashion, offering products from top brands like Nike, Adidas, and its own labels.
JD Sports Suffers as Consumer Demand Weakens
JD Sports blamed the unimpressive trading activity in October for the profit downgrade. The company faced challenges from weaker customer demand, especially in the U.S. ahead of the election, softer autumn weather, and cautious consumer sentiment.
In the third quarter, like-for-like (LFL) sales declined by 0.3%. Regionally, the LFL sales declined in key markets like the UK, North America, and Asia Pacific by 2.4%, 1.5%, and 3.8%, respectively. However, sales in Europe saw an improvement, with 3.5% growth in LFL sales. Overall, organic sales for the group increased by 5.4% in the third quarter.
Barclays Analysts Weigh in on JD Sports’ Update
Analysts at Barclays noted that JD Sports has lowered its profit guidance despite a positive shift in foreign exchange (FX) effects. The company now expects FX to impact profit by £15 million in the second half, an improvement from the earlier forecast of £20 million.
On the bright side, Barclays believes that trading conditions could improve with the colder weather, providing some optimism for a stronger year-end. Analyst Richard Taylor from Barclays has a Sell rating on JD stock.
Is JD Sports a Good Stock to Buy?
On TipRanks, JD stock has received a Moderate Buy consensus rating, backed by four Buys and one Sell recommendation. The JD Sports share price prediction is 161.80p, which is 62.4% above the current level.
