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You can find the current article at its original source at https://www.theguardian.com/business/2017/dec/14/sports-direct-reveals-falling-sales-profits-pound-slump-bites
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| Version 3 | Version 4 |
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| Sports Direct reveals falling sales and profits as slump in pound bites | Sports Direct reveals falling sales and profits as slump in pound bites |
| (about 15 hours later) | |
| Company says decline in sales at core UK stores due to cut in online promotions and closures, as profits dive 67.3% to £45.8m | |
| Sarah Butler | |
| Thu 14 Dec 2017 19.50 GMT | |
| Last modified on Thu 14 Dec 2017 22.01 GMT | |
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| Sports Direct has revealed falling sales at its core UK stores and a dive in profits partly caused by the slump in the value of the pound. | Sports Direct has revealed falling sales at its core UK stores and a dive in profits partly caused by the slump in the value of the pound. |
| Sales at the Sports Direct, USC and Heatons chains fell 1% to £1.14bn in the six months to 29 October, as the company said it had cut online promotions and closed stores as part of its attempts to improve the look and feel of its stores. | Sales at the Sports Direct, USC and Heatons chains fell 1% to £1.14bn in the six months to 29 October, as the company said it had cut online promotions and closed stores as part of its attempts to improve the look and feel of its stores. |
| Overall revenues for the group, which owns stores in the US and Europe as well as the Flannels fashion chain, rose 4.7%, partly thanks to acquisitions and overseas growth. | Overall revenues for the group, which owns stores in the US and Europe as well as the Flannels fashion chain, rose 4.7%, partly thanks to acquisitions and overseas growth. |
| But profits dived 67.3% to £45.8m in the half year as margins came under pressure from the fall in the value of the pound against the dollar, in which Sports Direct buys much of its stock. | But profits dived 67.3% to £45.8m in the half year as margins came under pressure from the fall in the value of the pound against the dollar, in which Sports Direct buys much of its stock. |
| Tony Shiret, an analyst at Whitman Howard, said in a note that changes to Sports Direct’s structure made it difficult to assess performance but he believed sales at the core chain’s established stores and website were both down. | Tony Shiret, an analyst at Whitman Howard, said in a note that changes to Sports Direct’s structure made it difficult to assess performance but he believed sales at the core chain’s established stores and website were both down. |
| Mike Ashley, chief executive and the majority shareholder of Sports Direct, said underlying profit before tax remained healthy and the company was investing for the long-term. | Mike Ashley, chief executive and the majority shareholder of Sports Direct, said underlying profit before tax remained healthy and the company was investing for the long-term. |
| “Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between 10 and 20 new flagship stores next year,” he said. | “Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between 10 and 20 new flagship stores next year,” he said. |
| Shares in Sports Direct closed down just over 2% as analysts were surprised by a big rise in net debt to £471m, from £182m a year before, and raised concerns about lack of transparency, corporate governance and investments in potentially distracting “strategic stakes” in companies such as Debenhams. | Shares in Sports Direct closed down just over 2% as analysts were surprised by a big rise in net debt to £471m, from £182m a year before, and raised concerns about lack of transparency, corporate governance and investments in potentially distracting “strategic stakes” in companies such as Debenhams. |
| Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Sports Direct’s corporate governance practices continue to attract headlines for all the wrong reasons, with independent shareholders rejecting an £11m payment to Mike Ashley’s brother on Wednesday. | Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Sports Direct’s corporate governance practices continue to attract headlines for all the wrong reasons, with independent shareholders rejecting an £11m payment to Mike Ashley’s brother on Wednesday. |
| “Unfortunately the lack of transparency also stretches to the ‘Selfridges of Sport’ initiative. Mike Ashley has described trading at the new format stores as ‘spectacular’, but it’s difficult to see evidence of that in the numbers. Improved profits are being driven by cost cuts rather than sales growth.” | “Unfortunately the lack of transparency also stretches to the ‘Selfridges of Sport’ initiative. Mike Ashley has described trading at the new format stores as ‘spectacular’, but it’s difficult to see evidence of that in the numbers. Improved profits are being driven by cost cuts rather than sales growth.” |
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