Sports Direct says full year earnings will be at bottom of range

23rd Mar 2016 07:25

(ShareCast News) - Sports Direct put out a statement clarifying that its earnings for the full year to the end of April will be at the bottom of the range announced back in January, after shares in the retailer tumbled on Tuesday following comments from founder Mike Ashley.The company had said on 8 January that earnings before interest, tax, depreciation and amortisation would be between £380m and £420m.Sports Direct shares fell sharply on Tuesday after Ashley told The Times the group was not trading well.He said he was concerned the retailer was losing momentum, adding that he would refuse to appear before a Commons select committee in June.He told the Times: "We are in trouble, we are not trading very well. We can't make the same profit as last year."We are supposed to be taking profits up, they are not supposed to be going down."The retailer, which was demoted to the FTSE 250 in the latest quarterly review, has been under the cosh since late last year, when it was hit by a damming report in the Guardian about its pay and treatment of staff, while a profit warning in January sparked a selloff in the shares.RBC Capital Markets kept its rating on Sports Direct at 'sector perform' but cut its target price to 425p from 500p saying the stock's valuation was undemanding but the company lacks top line and earnings per share momentum."We think trading conditions have remained challenging for Sports Direct due to a softer UK clothing and lower end sportswear market, bad publicity relating to its labour practices and weak sales internationally, particularly in Austria," the bank said.On Monday, Ashley told Sky News he refused to face MPs in parliament to answer questions about the way Sports Direct treats its staff.Ashley, who also owns Newcastle United football club, said he will challenge the formal order to appear before MPs, calling it an "abuse of the Parliamentary process".Ashley has invited MPs to visit his Derbyshire warehouse facility, but they rejected the offer on the basis that it was not in line with their "commitment to transparency".At 1120 GMT, shares in the retailer were down 4.7% to 361.30p.