Russ Mould, investment director at AJ Bell, said: “A big part of what had been, until fairly recently, a highly successful strategy for JD Sports has involved targeting a youthful demographic who, unlike those burdened by outgoings like childcare costs or a mortgage, have more disposable income to splash on trainers and leisurewear.
“However, recent figures suggest this cohort has been disproportionately hit in a slowing jobs market and, sure enough, JD flags unemployment as a key factor as it warns that profit will be at the lower end of expectations.
“The market reaction is fairly muted, with the shares seeing a weak run heading into the third-quarter update.
“Like-for-like sales for the third quarter were down 1.7 per cent, with performance particularly weak in the UK.
“Only the nascent Asia Pacific business showed any growth and this only makes a small contribution to the wider group for now.
“Any retailer is likely to see some ups and downs as it navigates fluctuations in the economy.
“What investors may be more nervous about is signs of shifting consumer tastes, particularly any waning of the athleisure trend which has been such a boon for the likes of JD.
“Guiding the market accordingly ahead of a crunch festive trading period seems sensible on the part of management.
“Time will tell if they have been conservative enough.”
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