JJB Sports profits hit by poor seasonal weather

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The Independent Online

JJB Sports, the UK's largest sportswear retailer, yesterday warned that profits were likely to fall 20 per cent below expectations for the year as poor weather knocked sales of summer clothes.

JJB Sports, the UK's largest sportswear retailer, yesterday warned that profits were likely to fall 20 per cent below expectations for the year as poor weather knocked sales of summer clothes.

News that the group's pre-tax profits were likely to be about £70m for the year hit the group's shares, sending them down by about 20 per cent during the day. They closed 32.75p down at 183.75p.

The company said last month that sales of replica football kits during Euro 2004 had surged, with sales of football gear up 36 per cent. But this was not enough to offset an overall decline in revenues, and like-for-like sales fell 1.3 per cent in the six months to 4 July. Since then, wet and windy weather has dampened demand for T-shirts and shorts. Sales of tennis racquets and balls, golf balls and bicycles have also declined as a result of the poor weather.

The finance director, David Greenwood, said: "Last year we had a long, hot, dry summer, which makes comparisons for this year very difficult. We are also finding that there has been very strong competition on the high street and from supermarkets, who have had very good offers on." Analysts believe like-for-like sales have fallen 4 per cent since the end of Euro 2004.

Mr Greenwood said he expected the malaise in trading to continue over the next few months. This would keep JJB's margins under pressure while it gets rid of summer stock by discounting prices. "We don't see the competitive environment getting any easier, or general economic conditions getting any easier," Mr Greenwood said, adding that the Christmas period would be key to rescuing the performance of the group.

The one area of growth for JJB is its combined health clubs and stores. It plans to open 14 stores next year, more than double the number scheduled for this year.

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