High-street chain JD Sports Fashion PLC (LSE:JD.) undershot its revenue target with 6% organic growth in the 22 weeks to 30 December 2023.
In a trading update, the group conceded that milder weather and a softer peak trading session, reflecting “cautious consumer spending”, impacted the top line.
Gross margins aligned with the prior year, but this also fell short of expectations.
An “elevated level of promotional activity during the peak trading period” means JD Sports’ full-year margins will be slightly lower than anticipated, with full-year revenue growth expected to be around 8%.
Profit before tax for the year ending 3 February 2024 will be between £915 million and £935 million, the group stated.
Régis Schultz, chief executive of JD Sports, stated: "We have made good progress against our five-year strategic plan, delivering global organic revenue growth of 6% in the period, against very tough comparisons with last year, and opening over 200 new JD stores in the year.
“Our key markets have seen increased promotional activity during the peak trading season, driven by a more cautious consumer, but we continue to grow market share. We are confident in our strategy and we continue to invest in our supply chain, systems and stores, supported by our strong cash generation and healthy balance sheet."
Shares tanked more than 18% following the trading update.