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Sports Direct delays 2019 figures

The retailer cited uncertainty over the performance of House of Fraser
July 15, 2019

Shares in Sports Direct (SPD) tumbled by as much as 16 per cent after the retailer announced the delay of its results for the year to 28 April and hinted that these figures could miss guidance issued in December. 

IC TIP: Hold at 237p

Management blamed the complexities of integrating last year’s acquisition of House of Fraser and uncertainty around the performance of the department store chain, together with increased scrutiny over audits and auditors, which had required it to compile more information than in prior years. 

Management now expects its full-year results to be published between 26 July 2019 and 23 August 2019, instead of 18 July. 

The sports retailer also warned that there are “a number of key areas to conclude” that could materially affect the guidance issued at the time its first-half results were announced in December. At the time, management said it was on course to increase underlying cash profits by between 5 and 15 per cent this year, excluding House of Fraser, but would be behind after taking into account the department store chain. 

Analysts at Peel Hunt placed their forecasts for 2019, 2020 and 2021 under review, arguing that “our suspicion is that trading in calendar 2019 has been very poor: weather patterns have been unhelpful and the “elevation” strategy may have worked for a handful of outlets but the core, untouched store portfolio remains under pressure”.