Sports Direct must be cursing the England team's early exit from the World Cup.
Its buyers had hoped to see the team in the last eight and bought in kits accordingly. But in the event the early exit and even the poor performance in the matches before that put punters off supporting their side with a new shirt. And so Mike Ashley's sports clothes chain was left with piles of unsold kits.
The build-up to the tournament started off well enough, with the March launch of the Umbro "Away" red shirt and as the World Cup kicked off things were looking positive with the retailer enjoying record trading on the day of the USA match. But then things turned as England's fortunes declined.
"Unfortunately, the period during the tournament was less successful and sales correlated with the poor performance of the England team and the negative mood this created amongst fans and consumers," the company said.
In the end, Sports Direct was left with a mountain of unwanted shirts. Its buying team had followed the seedings and was "confident of at least a 'last eight' outcome for England".
"So exiting the tournament before that meant in effect that we were one game short (although this was exacerbated by the disappointing performance in the four games). Therefore, the negative impact of clearing the excess stock will offset some of the positive pre-tournament trade," the company added.
The World Cup blow overshadowed news of a 50% rise in full-year pre-tax profits to £102.1m and the company's confidence in more growth next year.
The shares slipped 0.5% to 116.5p in late trading.
Analysts at Investec kept a "sell" recommendation on the shares, commenting in a note:
"Sports Direct's results are in line with guidance at EBITDA level, but have disappointed at PBT. With a refi to negotiate and a disappointing World Cup behind us, we think company guidance this year will prove too optimistic. In our view, the valuation remains too high for a financially and operationally leveraged business."
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