JD Sports ‘cautious’ over outlook amid inflation rise and strike threats

theguardian.com:

JD Sports has warned it remains “cautious” about trading over the coming months, as surging inflation and worker strikes threaten to curb consumers spending and disrupt its supply chain.

The sports retailer said that although sales over the past six weeks were 8% higher than a year earlier, it was aware that rising prices linked to a jump in energy costs could impact its earnings as shoppers cut down on their spending.

The group said it was also taking “necessary action” to offset its own costs, including by improving energy efficiency at its all of its sites.

“Given the widespread macroeconomic uncertainty, inflationary pressures and the potential for further disruption to the supply chain with industrial action a continuing risk in many markets, it is inevitable that we remain cautious about trading through the remainder of the second half,” JD Sports said.

However, it said it still expects full-year pre-tax profits, before exceptional costs, to be in line with the record annual performance it reported in January.

The retailer reported a 19% drop in pre-tax profits to £298m for the six months to July, partly due to the US government support it received as part of the country’s Covid stimulus package last year, which boosted comparable earnings.

Its chair, Andrew Higginson, welcomed a 5% rise in global retail sales over the period, saying the figure was encouraging amid supply shortages and challenging economic conditions.

“With this year expected to follow a more normalised trading pattern this result is at the top end of our expectations for the first half, demonstrating the ongoing resilience of our global proposition and the strength of our consumer engagement,” he said.

He added that while it was a “period of transition”