A sports retailer's stock took a huge dive after it warned of lower profits in the final quarter of 2023.
JD Sports (JDSPY) -), the UK-based sports apparel store, saw its stock decrease by over 20% over the last day after the company issued a warning that it would miss its initial expectations for Q4 2023.
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The company's shares on Jan. 4 opened at just $1.59 per share, despite closing at $2.12 per share on Wednesday, Jan. 3.
It now expects profits of around £915 million to £935 million ($1.16 billion to $1.18 billion) for the fiscal year ending on Feb. 3, which is down as much as £125 million ($158 million) from its prior projections.
The retailer — which has 177 locations in the United States according to ScrapeHero and over 3,300 stores around the world — cites the milder cold seasons starting in the fall as a reason for the sales dip. It also saw unexpected levels of promotional activity during the last season which potentially cut profit margins.
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JD Sports' struggles come despite what was still a positive spending holiday season despite expectations of a decline. Apparel actually saw a 2.6% increase in sales versus the year prior.
But that doesn't necessarily mean that it's been felt across the board. Just two weeks ago, Nike announced it would be cutting $2 billion in costs — which would include layoffs — over the next three years after it also lowered in sales projections.
Nike stock is down over 10% since the announcement.
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