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More pain for Sports Direct

After a stint of bad PR, there's more bad news out from retailer Sports Direct.
January 8, 2016

Mike Ashley's new year isn't off to the best start. Sports Direct (SPD) - the company he founded in 1982 - announced on 8 January that adjusted, underlying cash profits would fall short of the targeted £420m come the end of the financial year. Management blamed a "deterioration of trading conditions" on the British high street and "unseasonal" weather over the festive period for the anticipated shortfall.

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The profit warning comes amid a deluge of bad press for Sports Direct. The Guardian newspaper launched an investigation into working conditions and wages at the company shortly before Christmas. Sports Direct responded to this by announcing a review to be overseen by Mr Ashley. It subsequently announced it would pay its directly employed UK employees and "directly engaged casual workers" above the national minimum wage from the start of this year. It predicted this would cost roughly £10m on an annualised basis.

Questions also followed regarding reports of the employment of Michael Murray - who is reported to be Mike Ashley's daughter's boyfriend - at the business. The company said he was not paid a salary as his relationship with the business was on a consultancy basis.