JD Sports Fashion PLC (LSE:JD.) spooked investors after warning full-year profit would be at the low end of expectations due to “volatile” trading over the third quarter.
Consumer caution, unseasonal weather and the US election were all cited as having hit trading in October, leaving pre-tax profit on course to sit closer to £955 million in its range of up to £1,035 million.
Barclays noted investors may well have anticipated softer trading ahead of the update, pointing to a near 30% drop in JD Sports’ shares since mid-September.
“Other US retailers have mentioned the warmer autumn weather being unhelpful, but that trading has improved as weather has got colder into November,” analysts highlighted.
The low-end profit would imply a low single-digit risk to consensus expectations, Barclays added, forecasting the figure at £979 million against wider expectations for £986 million.
Shore Capital analysts cut its profit estimate by 3% to £960 million in the meantime, highlighting “relief” that JD Sports held guidance within its original range.
“That said, the group is growing, operating stores to high standards, and has the benefit of Courir and Hibbett yet to harvest,” Shore Cap said, after acquisitions which JD had said aided a 1,224 increase in its store base to 4,541 since the start of the year.
“Being international in scope, it is less vulnerable to the naivety and deceptions of the new UK government.”
Barclays offered up an ‘underweight’ rating following the update, while Shore Cap doubled down on a ‘buy’ and argued the shares were undervalued.
Panmure Liberum weighed in with a ‘hold’ rating, forecasting a 2% to 3% cut to consensus expectations on the update.
Shares fell 11.6% on Thursday.