Britain’s JD Sports is cautious on the outlook as cost pressure weighs

September 22 (Reuters) – Britain’s biggest sporting goods retailer JD Sports (JD.L) struck a cautious tone on Thursday amid fears inflation could drive up costs and strikes at ports are adding to supply chain challenges.

The company’s comments come amid rising energy and other costs in the UK, with fashion retailers Primark (ABF.L) and ASOS (ASOS.L) and online grocer Ocado Retail (OCDO.L) all warning of profits. Continue reading

JD Sports chief financial officer Neil Greenhalgh told Reuters that industrial action at the ports of Felixstowe and Liverpool, among other things, has exacerbated supply chain problems as its products are mainly shipped from Asia.

JD, which sells global brands like Nike (NKE.N), Adidas (ADSGn.DE) and Reebok, as well as own brands like Pink Soda and Supply & Demand, said UK sales, mainly online, had softened in August and early September , as customers were slow to embrace heavier fall products like sweatshirts and tracksuits while the weather remained relatively warm.

Greenhalgh said cheaper private label items are likely to do better than other brands and that the ‘Technicals’ clothing line performs best in this segment.

JD, which has over 900 stores worldwide, said sales in the second half of its fiscal year to date are up 8% year over year. It reiterated its forecast that net income by January 28, 2023 would match the record performance of the previous year.

Shares of the FTSE 100 (.FTSE) company fell as much as 8% to 113.95p, its lowest in three weeks, before paring losses to trade 4% lower as of 08:30 GMT. They were still the biggest percentage losers in the blue chip index.

Pre-tax profit fell 18% to £298.3 million ($335.3 million) in the six months ended July 30, while revenue rose 14% to £4.42 billion.

($1 = 0.8897 pounds)

Reporting from Aby Jose Koilparambil in Bengaluru; Edited by Devika Syamnath and Mark Potter

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