JD Sports has warned that less innovation in the products it sells has made its trading “challenging” at the moment, but said that things would ease up later this year.
The sportswear retailer said that it expects profits to be in line with its previous guidance of between £915 million and £935 million before tax and adjusted items in the year to early February.
It came despite a tough January when the business said it had to cope with “elevated promotional activity” – industry jargon for products being on sale.
The company “chose not to participate fully” in these sales in the UK and Ireland, which were mainly online. As a result like-for-like sales fell by 3.2% in the region in the fourth quarter.
The business said that profit could be both lower or higher in the current financial year than it was last year. It expects pre-tax profit to be between £900 million to £980 million.
“Looking ahead, the current trading environment remains challenging due to less product innovation and elevated promotional activity, especially online,” said chief executive Regis Schultz.
“We anticipate trading conditions will improve as we move through the year, helped by a busy sporting summer and softer comparatives with last year.”
The company opened 215 new JD shops in the year to early February, and said that the launch of a new UK loyalty programme had been “encouraging” and attracted 800,000 downloads so far.
Overall like-for-like sales rose 4.2% during the year, with Asia Pacific – especially Thailand and New Zealand – leading the way at 11.8%. The worst performing region was the UK and Ireland, on growth of just 0.8% over the year.
“In our 2024 financial year, we outperformed the sportswear market, reflecting the strength of our business,” Mr Schultz said.
“We achieved like-for-like sales growth of over 4%, organic growth of over 8%.”
He added: “We made good strategic progress, opening 215 new JD stores.”
Shares rose 6.3% on Thursday morning.