JJB Sports Plc warned on full-year profit after slumping to a first-half loss and axing its dividend. The U.K. sports retailer and health clubs group said it expects underlying pretax profit for the year ended Jan. 2009 to be about £15 million ($27.6 million), down from previous estimates of £30 million. JJB also expects tough trading conditions to persist until 2010.
The company reported a deficit excluding exceptional items of £9.7 million ($17.8mm) for the 26 weeks ended July 27, compared to profits of £8.3 million ($15.3mm) a year earlier.
Retail revenues for the half-year were down 7% to £309.1 million ($569mm) as a result of the closure of 96 stores and a 4.2% drop in same-store sales. The same-store figure widened to 5.6% for the 34 weeks ended Sept. 21. Earlier this year JJB closed 72 unprofitable stores and cut 800 jobs. Gross margin improved 90 basis points, driven by the introduction of more of JJB’s own brands.
The half-year loss also reflected losses at the Original Shoe Company and Qube, which JJB acquired at the start of the period. Performance at the two businesses was lower than expected, but JJB said it was pleased with the direction in which the businesses were going.
For the 34 weeks to Sept. 21, group sales were down 8.5%.
