John David dives on fresh alert

SHARES in John David slumped as much as 20% after the sports retail group issued its second profits warning this year.

Ahead of Thursday's annual meeting, new chairman Roger Best said he expected profits for the year to the end of January 2004 to be 'significantly below' market expectations.

The group, which takes in the 257-strong JD Sports stores chain, said an improved second half was unlikely to make up the first-half shortfall.

In its last financial period, covering the 10 months to January this year, profits fell from £20m to £10.8m. The company warned in January that it had been hit by poor sales over the festive season.

When those figures were reported in May, the group indicated there had been some recovery in trading.

But Best said today that, despite a promising Easter, like-for-like sales fell sharply in May and overall underlying sales for the six months ended 31 July were down by 3%. The decline in JD Sports was 0.5% but the First Sport division fell 6%. Gross margin fell by 1.5%, due to an earlier summer sale period and First Sport's poor performance.

The shares recovered some ground by mid-afternoon, down 27p at 150 1/2p.

John David has been converting the First Sport stores to the JD fascia, with just over 100 converted to date. Best said in most cases performance had improved as a result but many stores had been hit by what he calls 'an unbalanced product offer', together with disruption caused by the integration of the business.