JJB Sports expects profit fall

11-09-2007

JJB Sports expects profit fall
JJB Sports has warned that its first-half profits are expected to be around 30 per cent lower than previously anticipated.

In a statement today the sporting goods retailer said that its net profit before tax, for the 26 weeks to July 29th, was expected to be around £8 million – some £3.5 million below its original expectations.

The company blamed tough comparatives stemming from last year's football World Cup for falling sales at its stores.

JJB said that revenue across its retail outlets dropped by 6.2 per cent on the corresponding period of 2006. However it stressed that excluding the sale of replica kits, store revenue fell by 1.3 per cent over the same period.

Nonetheless, the profits warning saw JJB shares drop by 11 per cent, to a two-year low, in early trading.

Confirmation that JJB sales are struggling comes on the same day that clothing retailer Next revealed that like-for-like sales across its own stores dropped in the first-half, amid a "challenging" market environment.

Ahead of the publication of its own interim results on September 28th, JJB said that it was currently in talks with Adidas and Nike about "how to optimise their brand presentation" within its stores.

"We are also seeking to increase the proportion of own brand products within our stores and are in negotiation with a number of brands to acquire their UK distribution rights, enabling us to achieve a higher proportion of our retail revenue in future from this category of supplier," the company confirmed.

JJB added that the expansion of its chain of combined health clubs and superstores was continuing, with the company planning to open nine such units during the current accounting period.


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