JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) will report interim results next Wednesday, 24 September, with analysts expecting the sports and leisure retailer to confirm a fall in profits and to try and keep guidance realistic.
First-half adjusted profit before tax should come in at about £350 million, a decline of around 13% year on year, reckons Shore Capital.
Like-for-like sales were down 2.5%, the company revealed around a month ago, with regional trends including UK sales down 3.3%, US down 3.8%, Europe seeing a 0.4% decline, while Asia-Pacific was down 2.4%.
Management is targeting full-year adjusted PBT of about £885 million, with results this year weighted more heavily to the second half due to FX headwinds and expected synergies from US acquisition Hibbett.
Shore Cap analysts commented: “While the LFL sales decline in a tough market goes some way to explaining the muted valuation of JD, we also partly attribute this to a lack of confidence in the market in the guidance provided by management.”
Since April, CEO Regis Schultz has been focusing on throttling back capital expenditure and ruled out further M&A in the near term.
Shore Cap said if he can deliver on his "more realistic" guidance from recent updates, "we would expect market confidence to improve and for a re-rating to follow".