JJB’s shares slide on tough trading outlook
SHARES in retailer JJB Sports slumped 18% this morning after a trading update warned of further difficulties.
The Wigan company, still looking to return to profit under a new management team after a turbulent last two years, said it was having to rely on promotions to drive sales.
This has “significantly affected” gross profit margins, the company said, sending shares down 17.8% to 7.89p.
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JJB said in a trading update: “Like-for-like sales in the period from 27 September to 7 November increased by 13.1%, lower than anticipated after taking account of the company’s promotional initiatives and reflecting the weakening market environment.
This also impacted gross margin for the same period.
“The board believes that current trading conditions are having and will continue to have a negative impact on its expectations for the full year.”
The company said the outcome for the full year remains “heavily dependent” on the important pre-Christmas and New Year sale trading periods.
JJB is operating within its £25m facility with Bank of Scotland – net debt at November 7 was £16.6m.
On a more positive note the company said it was encouraged by the performance at five newly-refurbished stores, and that a new operating board was now complete with the arrival of trading director Kate Hayes from November 1.
