Sports Direct profits sink on weak pound and expansion – Telegraph.co.uk
Sales are expected to have risen from £2.8bn to £3.2bn on the back of new store openings. Trading has been overshadowed by a whirlwind of negative publicity following last year’s investigation into its treatment of workers.
A string of board resignations, unusual stake purchases and most recently a court battle with a former close adviser over an alleged £15m pub bet have wrecked the retailer’s reputation.
For the last 12 months, Sports Direct’s shares have been trading at levels not seen since the dark days that followed its disastrous stock market float in 2007.
Jonathan Pritchard, a Peel Hunt analyst, said that he expects gross margins to be “down a mile, mostly a function of the costly currency”. The chain has already warned that it expects to take a £35m earnings hit as a result of the weaker pound.
Mr Ashley took the reins of Sports Direct last year after the resignation of Dave Forsey, the chief executive, days after a damning report into the firm’s Shirebrook warehouse, where MPs said conditions were like a Victorian workhouse.