Jan 8, 2016
Shares in Sports Direct hammered by profit alert
Jan 8, 2016
Sports Direct, Britain's biggest sportswear retailer, warned on Friday annual profit could be up to 40 million pounds ($58 million) lower than guidance issued less than a month ago, hammering its shares.
Shares in the firm, majority owned by billionaire founder Mike Ashley, fell up to 17 percent after it said it was no longer confident of meeting its adjusted core earnings target of 420 million pounds for the 2015-16 fiscal year.
It said that since it published interim results on Dec. 10 it had seen a deterioration of trading conditions and a continuation of unseasonal weather over the key Christmas period.
Anticipating similar trading conditions between now and the end of its financial year at the end of April, it guided to core earnings of 380-420 million pounds.
The stock, which has now fallen 34 percent over the last month, was down 70.7 pence at 441.6 pence at 1335 GMT, valuing the business at 2.64 billion pounds.
Sports Direct has been under fire from media, investors and politicians over its working practices and its December update also disappointed.
Earlier this week, clothing retailers Next and Marks & Spencer also said their Christmas sales had been dented by unusually mild weather.
"Updates by fashion peers have confirmed the ongoing pressure in demand in recent weeks, both in the UK and in Europe. The lack of snow in the Alps certainly represents an added challenge for some European operations," said analysts at Jefferies.
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