Latest Posts

Finding Houses For Your New Property Business

Last time we looked at Market studies, one of the subjects to be researched turned into houses that might be present to be had...

The screen recording software that is available nowadays runs the gamut between the most basic of recorders to advanced tools with lots of options....

Bill Shorten rebukes Stephen Conroy over attack on governor general

Bill Shorten has rebuked a senior member of his team for making remarks critical of the governor-general. On Monday morning, Stephen Conroy accused Sir...

No Brexit general election if Boris Johnson wins Tory leadership

It is understood that Boris Johnson would not call a general election immediately if he won the Conservative party leadership election and took over...

Sports Direct clarifies earnings after ‘profit warning’ sinks shares

Sports Direct has been forced to clarify its profit expectations for the year after its founder, Mike Ashley, admitted in a newspaper interview that the retailer was “not trading very well.”

In a statement to the stock exchange on Wednesday morning, Sports Direct said it expected annual earnings to be near the bottom of the £380m to £420m range it published when it blamed warm weather for poor trading over Christmas.

3209

The company’s announcement followed what appeared to be a further profit warning by Ashley on Tuesday. He told the Times that scrutiny of his company’s practices was damaging its sales at the expense of profit.

Sports Direct shares tumble as Mike Ashley reveals profit slump

In its last financial year, the group made £383.2m of earnings before interest, tax, depreciation, and amortization. The City interpreted Ashley’s comments as the latest in a series of profit warnings, despite no formal statement being made to the stock exchange.

The statement on Wednesday guided investors towards the lower end of the previously announced range, suggesting performance was indeed worse than the average analyst’s forecast.

Ashley told the Times: “We are in trouble; we are not trading very well. We can’t make the same profit we made last year. We are supposed to be taking the profits up, they are not supposed to be coming down, and the more the media frenzy feeds on it, the more it affects us.”

Sports Direct’s Mike Ashley proves silence isn’t always golden

Nils Pratley

Sports Direct shares, which have more than halved since August, tumbled by more than 10% on Tuesday after Ashley’s comments. The shares fell again on Wednesday, dropping by more than 4% to 310p by late morning.

The company’s statement on Wednesday said: “In the light of recent press coverage, Sports Direct wishes to clarify that its current expectations for adjusted underlying Ebitda (before share scheme costs) for the full year to the end of April 2016 are at or around the bottom of the range announced on 8 January 2016.”

The company, the subject of a Guardian investigation into pay and working conditions at its warehouse in December, was ejected from the FTSE 100 group of leading shares this month as concerns about its weak trading combined with unrest about its governance and methods.

The House of Commons business select committee has been pursuing Ashley, who owns 55% of the company, to answer Sports Direct’s treatment of staff and governance. Ashley has refused, accusing MPs of trying to create a damaging media circus around the company.

Analysts at the stockbroker Peel Hunt said Ashley’s complaints showed he failed to address the “strategic crisis” at the company. The analysts said that big brands such as Nike and Adidas are fed up with Sports Direct’s unattractive stores and poor service and have stopped sending it their top products.

“Blaming the weather, MPs, the press, and the astrological position of Saturn just [smacks of] a business in denial. The more management blames everybody but themselves for the situation, and the longer recovery will take,” the analysts said. They cut their price target for Sports Direct by 50p a share to 325p.

Ashley’s comments are likely to reinforce the view of many investors that Sports Direct operates outside the norms of other large public companies. Shareholders are increasingly unhappy about Ashley’s grip on the company as its majority shareholder and deputy chairman Frett Board.

Nick Bubb, an independent retail analyst, criticized Sports Direct for taking more than a day to set the record straight after Ashley’s comments appeared. Companies are meant to keep investors informed about their performance in a timely and orderly manner.

Latest Posts

Finding Houses For Your New Property Business

Last time we looked at Market studies, one of the subjects to be researched turned into houses that might be present to be had...

The screen recording software that is available nowadays runs the gamut between the most basic of recorders to advanced tools with lots of options....

Bill Shorten rebukes Stephen Conroy over attack on governor general

Bill Shorten has rebuked a senior member of his team for making remarks critical of the governor-general. On Monday morning, Stephen Conroy accused Sir...

No Brexit general election if Boris Johnson wins Tory leadership

It is understood that Boris Johnson would not call a general election immediately if he won the Conservative party leadership election and took over...

Don't Miss

Trains, buses and automobiles

Londoners have a tempestuous relationship with transport, and Ken Livingstone will be an outlet for their anger or gratitude come May 1. Whatever you...

The Automobile Club of Egypt by Alaa al-Aswany review – a country on the brink of violent change

In the days before Egyptian President Hosni Mubarak was ousted in February 2011, Alaa al-Aswany, dentist, novelist, and founder member of the democratic movement...

5 Places to Visit that will make you fall in love with Utah

Utah is the apple-of-the-eye of outdoor freaks, with more than 80% of the state set aside for public use. This means lots and lots...

West Indies book final with Australia after Proteas collapse

Australia will face West Indies in an ODI tri-series final after South Africa meekly surrendered to the hosts by 100 runs in Barbados. In...

The MLB prospect chasing a T20 dream: ‘I’m going all in with cricket’

As far as cultural adjustments go, the traffic jams in Bangalore grabbed the attention of Boomer Collins. Born in the open spaces of Dallas,...

Stay in touch

To be updated with all the latest news, offers and special announcements.