JJB discounts send share price down

JJB SPORTS saw is shares slide yesterday after it admitted it would be forced to step up promotions in the face of the gloomy consumer environment.

The retailer said tough times required slashing prices – but the stock plummeted after the announcement closing 14.6 per cent lower at 9.4p.

The 249-store-group said sales at stores open at least a year rose 18 per cent from 2 August to 29 August, but that growth slowed to six per cent from 30 August to 26 September.

Analysts said the promotions could hit profit margins and JJB shares, which have been struggling to recover since the group narrowly missed falling into administration last year.

Singer analyst Matthew McEachran said: “In light of the worse trading and margin investment we expect forecasts to come under pressure with losses now likely in the all-important second-half period.”

JJB made an operating loss before one-off items of £22.5m from its ongoing business in the six months ended 1 August, up from a loss of £42.5m the same time last year.

Chief executive Keith Jones, who warned in May it would take three years to turn the business around, said he expected a full-year adjusted operating loss within analysts’ existing forecast range of £20m to £30m.