* Sees Blacks posting 4-5 mln pound H2 loss
* Sees break-even for Blacks later than previously forecast
* Core sports division sales up 3.2 pct over Christmas
* Shares rise 0.7 pct
By Helen Massy-Beresford
Jan 10 JD Sports Fashion said one-off
losses at Blacks would push full-year group profit to the low
end of expectations and the outdoor clothing retailer would
break even later than previously expected.
The British retail group, which bought Blacks from
administrators in January 2012, forecast losses of 4-5 million
pounds for Blacks in the second half of the year, down from a 10
million pound loss in the first half.
Those one-off losses at the outdoor unit would result in
group annual profit before tax and exceptional items at the
lower end of market expectations, currently 60 million pounds
($96.05 million), JD Sports said on Thursday.
That implies losses from the outdoor division were more
significant than expected, Seymour Pierce analyst Freddie George
wrote in a research note.
Chairman Peter Cowgill said he now expected break-even at
Blacks only by the second half of next year, rather than
September's estimate of the second half of this year.
Cowgill said the forecast had been revised since recent
changes in the division's management team.
"If you were talking to me this time next year, I'd be
disappointed if we hadn't broken even in that back half (H2),"
As part of the turnaround strategy for Blacks, which sells
outdoor goods from brands including North Face and Berghaus, the
group is reviewing the positioning, size and number of stores.
"It's a rationalisation rather than purely a curtailment.
There are very few closures on the cards at the moment but it's
under constant review," Cowgill said.
British retailers have been battling inflation, subdued
wages growth and government austerity measures leading to
tightened household budgets, with camera specialist Jessops the
latest casualty after calling in the administrators on
While seasonally-sensitive Blacks stores also suffered as
mild weather over Christmas discouraged customers from buying
thick outdoor jackets, the "engine room" of JD Sports' business,
its UK and Ireland JD Sports stores - saw sales rise 3.2 percent
rise in the seven weeks to Jan. 5.
After 49 weeks, cumulative like-for-like sales rose 2.4
percent, it said, adding that the margin had improved and was
near to last year's level in the year to date.
"No mean feat, given the level of discounting in the
marketplace," N+1 Singer analysts wrote in a research note.
Shares rose 0.7 percent by 1056 GMT .
JD , which sells clothing and footwear from brands including
Nike and Adidas, said headline earnings for
the sports division should marginally exceed last year's.
"We believe this represents a very robust outcome given the
tough operating environment and highlights the ongoing strength
and resilience of the core business," N+1 Singer said.
The group's smaller fashion business - which trades under
the store names Bank and Scotts and accounts for about 10
percent of its business - saw sales fall 7.9 percent in the
seven-week period and 3.9 percent over 49 weeks.
"(We are) now very focused on improving the performance in
this business," the company said in a statement on Thursday.