In a trading statement released on Monday, the company said that, while it experienced a strong Christmas, trading during February and March had been 'difficult' and it was therefore 'prudent' to revise both its sales growth and margin expectations for the second half of the year.
Jessops expects like-for-like store sales growth in its first half, ending March 27, to be about 1 per cent, with a similar slowing in non like-for-like stores and non-store sales, resulting in an anticipated total sales growth of about 4.4 per cent for the period. This is considerably lower than analysts' earlier expectations of double-digit sales growth.
The company said that, while it has maintained its own share of the key digital camera market, the digital sector has been particularly hard hit by the decline in consumer spending, with sales 'considerably below management's expectations'. The company said margins had been further affected by price reductions, because it had been forced to increase volumes through price cuts.
The retailer, the UK's largest specialist photographic chain, stated that it expects like-for-like growth rates to improve in the second half of the year, with plans for product launches and an improvement in its range of digital SLR cameras.
Analysts, however, remained fearful. 'A very disappointing result and one that will shock the market over the extent of the consumer slowdown,' said Seymour Pierce analyst Rhys Williams. 'If a company operating in one of the most sought after product categories is failing to meet expectations then we remain bearish on demand for less exciting retail offers.'