Shares of JD Sports Fashion PLC (GB:JD) dropped sharply on Tuesday after the retailer downgraded its annual profit forecast for FY25. The company now expects its full-year profit before tax and adjusting items to range between £915 million and £935 million. Following the update, JD stock opened in red with a loss of almost 10% as of writing.
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JD Sports Fashion is a retail company focused on sportswear and fashion, offering a range of international brands such as Nike and Adidas, along with its own label brands.
JD Sports Faces Weak Trading Performance
JD Sports has warned of a difficult year ahead after it faced a weak trading performance in the UK and the U.S. Meanwhile, its sales were also hit by increased promotional activity. As a result, the company reported a 1.5% decline in like-for-like (LFL) revenue for November and December. Nonetheless, it achieved a solid numbers during Christmas, with December LFL revenue increasing by 1.5%.
Year-to-date, LFL revenue has remained steady, and the company expects its full-year LFL revenue to align with this trend. Additionally, its organic revenue grew by 3.4% during the period, with full-year organic revenue growth projected at approximately 5%. Among its segments, Footwear sales outperformed apparel, while its stores surpassed the online channel.
Despite multiple headwinds, the company reported solid gross margins and a healthy inventory level. For the full year, the gross margins are expected to stay at 48%.
Is JD Sports Share a Buy?
On TipRanks, JD stock has received a Moderate Buy rating, backed by six Buy, two Hold, and one Sell recommendations. The JD Sports share price prediction is 131.8p, which is 51.6% above the current level.
