Sports Direct lowers full-year earnings forecast
Published 23/03/2016 | 08:52
Sports Direct lowered its full-year core earnings forecast on Wednesday after Mike Ashley, the owner of Britain's biggest sportswear retailer, revealed a trading slowdown in a newspaper interview.
Flouting the rules on how companies disclose financial information, Ashley told the Times newspaper on Tuesday that Sports Direct was "in trouble, we are not trading very well", sending its shares sliding 10pc.
In a one-line clarification statement released 24 hours later, Sports Direct said it now expected its full-year 2015-2016 underlying core earnings to come in "at or around the bottom of the range" announced in January.
The earnings downgrade, which followed a similar cut to forecasts in January, reflect the sudden change in fortunes of a firm which has a presence on most British shopping streets, offering low priced sports goods through its 450 stores.
Ashley, who also owns Newcastle United soccer club and 55pc of Sports Direct, has become embroiled in a row with politicians after a newspaper investigation alleged some staff were effectively earning less than the minimum wage.
The company has rejected criticism around its working practices and launched a review of working conditions.
Ashley has been called to parliament to answer questions over how the company is run but has so far refused to attend. He has instead invited politicians to visit his warehouse in Shirebook, central England, which they have refused to do.
In the interview with the Times, the billionaire founder who wears jeans and a white shirt instead of a suit, said the negative publicity surrounding the retailer had led to a slowdown in trading. He said he had decided to speak out to stop the "public vilification" of Sports Direct.
Shares in the group have fallen 60 percent in almost two years. If core earnings were to come in at the bottom of the £380m to £420m range forecast in January, that would represent a small fall from the previous year when the company reported £383m in profit.
Shares in Sports Direct fell 2pc on Wednesday to give the group a market value of £2.25bn.