Sports Direct has issued a profit warning and Umbro has cautioned kit sales will be hit hard following England’s failure to qualify for the 2008 European Football Championships last night.
Sports Direct, owned by controversial entrepreneur Mike Ashley, blamed the latest in a series of profit warnings at the troubled retailer on the disastrous outcome of the England team’s match against Croatia.
In September, the company warned that it expected EBITDA for the full year to the end of April to “show limited growth”.
The retailer said in a statement today: “As England have not qualified for the 2008 European Football Championships, the company can no longer be confident of achieving that level of financial performance and believes at this stage that pre-exceptional EBITDA for the current financial year is likely to be below that achieved in the last year.”
The trading update from Sports Direct, which has an uneasy relationship with the City, raised eyebrows. Pali International analyst Nick Bubb said: “They have come out today with a belated profit warning, blaming the England defeat last night. We suspect that the real issue is poor trading in the core business and always assumed that profits would be down anyway, despite the gross margin push.”
Meanwhile Umbro, which agreed to a£285 million takeover by Nike, said the failure to qualify would hit kit sales this year and next. "The effect on 2008 revenues, though still unclear, will be more pronounced due to a substantial reduction in our expected sales volumes for the new away jersey," it said.
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