JD Sports has lowered its profit before tax guidance again, after citing a "challenging market".

The sports retailer lowered its profit guidance for the current financial year back in November, dropping it to between £955m-£1.035bn.

However, with like-for-like (LFL) revenue dropping by 1.5% in November and December, the company now expects its profit before tax for the full year to reach between £915m-£935m.

JD Sports added that in the year to date, LFL revenue has remained flat and it expects this to remain at a "similar level" in the full year.

Despite these results, organic revenue increased by 3.4% in the nine weeks to 4 January, with full year organic revenue expected to increase by around 5%.

Chief executive officer at JD Sports Fashion, Régis Schultz, said: "Considering the current headwinds in the market, we performed well, delivering organic revenue growth of 3.4% across the period, and a strong Christmas resulted in LFL revenue growth in December.

"In line with our proven long-term approach, we chose not to participate in what was a more promotional environment in the period than we anticipated, fully maintaining our trading discipline to deliver gross margins ahead of last year, clean inventory and strong cash management.

"While I am pleased overall with our performance, market headwinds were higher than we anticipated and therefore our full year profit forecast is slightly below our previous guidance. With these trading conditions expected to continue, we are taking a cautious view of the new financial year."

Consumer discretionary analyst at Quilter Cheviot, Mamta Valechha, stated that it appears that the retailer is “suffering at the hands of what is a very difficult retail market".

She concluded: "While JD Sports has not called out any brand in particular, it is well understood that a significant amount of the company’s woes are related to Nike. In December, just before the Christmas break, Nike’s reporting saw it push its inflection point out for at least another two quarters, with the coming two quarters being clear out events. The supply of new franchises will be further constrained over the next few seasons, which we would expect to hinder top line momentum for JD Sports too.

"While Nike’s clearance is on its own digital channel, it has led to an environment where it is capturing and competing with its wholesale partners as opposed to creating and growing demand.

"With this in mind, visibility is low for JD Sports. However, its shares are currently cheap at 6.7x and, at 96p, it is now even cheaper than during the pandemic."

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