Ailing Sports Direct issues profit warning
Sports Direct has issued a profit warning, blaming “deterioration of trading conditions on the high street and a continuation of the unseasonal weather over the key Christmas period”.
In a trading update this morning, the company said it is "no longer confident" it will meet its projected £420m and now expects earnings to be between £380m and £420m.
The months prior to Christmas proved difficult for the retailer as it battled ongoing criticism over its treatment of employees.
£500m was wiped off its stock market value in early December after a set of poor results compounded the City’s reaction to the Guardian’s expose on the working conditions among its warehouse staff.
Industry observers have questioned whether the battered reputation of the brand is finally starting to impact its long-term value, leading chief executive Mike Ashley to vow that in 2016 over £10m would be ploughed into improving wages.
On the back of today’s profit warning, shares in Sports Direct fell by more than 5 per cent. In total, its shares have dropped by 34 per cent since the beginning of December.
Sports Direct has not been the only casualty of poor Christmas trading. This week, Next and M&S both reported falling sales while Poundland similarly issued a profit warning.