Shares in Sports Direct International (SDI) took another hit last week after the British sports retailer warned that it suffered from deteriorating retail trading conditions and unseasonal weather over the holiday season. SDI thus admitted that it was no longer confident of reaching a previously set target of £420 million for its underlying earnings before interest, tax, depreciation and amortization (Ebitda).
Anticipating similar trading conditions until the end of April, SDI's management downgraded its expectations for adjusted underlying Ebitda to a range between £380 million (€506.8m-$552.1m) and £420 million (€560.0m-$610.1m), excluding costs relating to its employee bonus scheme.
SDI's share price has shrunk by more than 40 percent since the start of December, after several reports about employment and governance issues (see the article below). The warning marks a rapid deterioration since SDI published its interim results on Dec. 10.
Several other British retailers have suffered from lower footfall and mild weather in the holiday season. The BDO High Street Sales Tracker recorded a 5.3 percent decline in comparable store sales in December, which was the worst score since 2008. The late snow in the Alps probably didn't help SDI's operations in central Europe.