The Sports Direct share price has dropped significantly today after the group delayed the publication of its full-year figures.
Sports Direct share price falls after results delay
Sports Direct's share price plunged on the open but has recovered some of those early losses, and is trading 21.4p (8.1%) lower at 242p in early afternoon trading. The company was originally planning on posting its annual numbers on Thursday 18 July, but now that has been pushed back to sometime between 26 July and 23 August.
The group said that some complexities arose from the integration of House of Fraser, and combined with tougher auditing regulations, prompted the decision to hold off on announcing the figures this week. The firm warned about "current uncertainty as to the future trading performance" of House of Fraser. Sports Direct wants to firm up details in a few areas which could "materially affect" the guidance that was issued in December. Delays in relation to amalgamating accounts can happen, but some investors are concerned about the health of House of Fraser.
Strategy to buy struggling retailers
The company has been in the news regularly over recent months, as CEO Mike Ashley is on the acquisition trail. The organisation bought out Evans Cycles, and was engaged in a battle to try and take control of Debenhams. This morning it was revealed that Sports Direct has upped its stake in Game Digital to almost 84%, and intends to delist the gaming company from the London Stock Exchange. At a time when the high street is struggling, it seems Mr Ashley is hell-bent on snapping up distressed retailers.
Mr Ashley is keen to use the influence of his retail empire to wrangle better deals form landlords, suppliers and creditors. Traders are mindful that Sports Direct warned that November was "unbelievably" bad, and it appears that House of Fraser could be underperforming. Warren Buffett once said "be fearful when others are greedy, and be greedy when others are fearful", and it seems that Mr Ashley is expanding his empire while others are running scared.
Last week the British Retail Consortium issued its retail sales report, and the reading was the weakest since records began in the mid-1990s. Shoppers are becoming savvier, and retailers are perhaps too keen to offer promotions – often at the expense of their margins. Indeed some analysts and investors are concerned that Sports Direct has become too greedy, but we will now have to wait a while longer to discover the finer details within the company's annual figures.