Global retailer JD Sports Fashion’s festive season trading update on Tuesday spoke of a “robust trading performance in a challenging market” with revenue rising in the nine weeks to 4 January. But the news also came with a profit warning.

CEO Régis Schultz said the company “performed well” when “considering the current headwinds in the market” with organic revenue growth of 3.4% across the period.

The “strong Christmas” also resulted in like-for-like (LFL) revenue growth in December with a rise of 1.5%.

But LFL revenue across November and December combined was actually down 1.5% “in a challenging and volatile market that saw increased promotional activity”. 

The company said footwear sales grew and outperformed apparel, and its stores actually outperformed its online channel. 

It also saw a strong LFL revenue performance through the period from its Sporting Goods and Outdoor segment, and its international diversification strategy was justified as LFL revenue growth in Europe and Asia Pacific partially offset weaker LFL trading across the UK and North America. 

As for its recent acquisitions, US-based “Hibbett traded slightly ahead of the wider North America business and [France’s] Courir traded well across the weeks following acquisition”.  

The company’s financial year runs from February to January and it added that year-to-date, LFL revenue is flat while it expects the full-year figure “to be at a similar level to this”. Organic revenue growth in the period has been 3.4% and it’s predicting full-year organic revenue growth to be around 5%.

Given its focus on selling at full price, it said gross margins “remain robust on the back of our continued price and promotional discipline, across both stores and online. Gross margins in the period are ahead of last year with the full-year gross margin expected to be around 48%, in line with last year”.

The company had chosen not to cut prices even though the extent of the promotional environment clearly took it somewhat by surprise. The result was that it has been “fully maintaining our trading discipline to deliver gross margins ahead of last year, clean inventory and strong cash management”.

And that profit warning? While Schultz was “pleased overall with our performance, market headwinds were higher than we anticipated and therefore our full-year profit forecast is slightly below our previous guidance. With these trading conditions expected to continue, we are taking a cautious view of the new financial year”.

It now expects full-year profit before tax and adjusting items to be between £915 million and £935 million. At the time of its interim results in October it had given a full-year guidance range of between £955 million and £1.035 billion.