Profit warning from Sports Direct?

Leading sports retailer Sports Direct has released a pre-close statement regarded by many City analysts as a thinly veiled profit warning.

The retailer said EBITDA for the 52 weeks to April 29 'will be broadly in line with market expectations'.

It added: 'Sales growth in the main UK retail business is slower than earlier in the year, but remains positive.'

Panmure Gordon analyst Philip Dorgan believes the trading statement raised more questions than it answered. He cut his estimates by 9 per cent for this year and by 20 per cent for next year. He said: 'Such substantial downgrades in such a short space of time leave the growth story in tatters and we are no longer prepared to assume strong EBITDA margain growth.'

He shifted his stance from buy to sell and cut his target price from 300p to 200p.

Sports Direct was floated on the stock market at 300p a share in March by billionaire founder Mike Ashley and has a turnover of£1.2 billion.

Seymour Pierce analyst Richard Ratner said: 'Sports Direct has a major credibility problem, not helped by the fact that Mike Ashley is a maverick.'

Pali International analyst Nick Bubb added: 'Today's pre-close update was probably designed to be reassuring, but it has exactly the opposite effect, with the perception that it is a disguised profit warning, leading to further panic.'