It's no surprise that high street retailers are having a rough time at the moment, and even JD Sports - which seemed to have been doing well enough up until now - has now succumbed to the gloom.
It said sales in sixteen weeks to mid-November had edged up just 0.2% and in fact had declined by 1.5% taking into account the rise in VAT to 20%.
This compares with a gross like for like increase of 3.3% in the seven weeks to September 17, or a net gain of 1.6%, indicating a recent slowdown in sales. It pointed to a "marked decline in consumer confidence" and "continuing downward pressures on all elements of discretionary spending."
Perhaps surprisingly it is optimistic about its prospects in France - where it opened two new stores - Spain and Ireland, despite the current eurozone crisis.
The key to its future performance of course will be the festive season, and it warned it was expecting a tough Christmas trading period although it still expected its earnings would be in line with expectations. The news has sent its shares 32.5p lower to 782.5p. But analysts remained upbeat. Jonathan Pritchard at Oriel Securities said:
JD's statement suggests that like for like trading was about 5% slower in October/November than it was in August/September. This far from ideal but clearly a function of the younger consumer market rather than anything JD-specific, and the fact that forecasts are expected to meet current expectations is of genuine solace. The slowdown in top line momentum may mean some pressure on the shares but extended weakness would be a buying opportunity.
David Jeary at Investec said:
While current trading conditions are undoubtedly challenging, JD's conservative management style, strong roster of brands and international growth opportunities (both retail and brand) offer more significant longer-term potential than suggested by what remains an undemanding rating, in our view. We remain buyers of the shares, with an unchanged target price of 1065p.
