24th Jun 2016 14:35
LONDON (Alliance News) - Sports Direct International PLC on Friday said market volatility and exchange rate movements following the UK's decision to leave the EU are likely to hit purchases it makes from the current financial 2017 year and beyond.
"Following the outcome of the referendum, Sports Direct notes the associated market volatility and in particular material changes to sterling/dollar exchange rates, and the lack of transparency as to those rates in the short to medium term," the sporting goods retailer said in a statement.
"These factors are likely to impact purchases for which the company is currently not hedged for the financial 2017 period and beyond. The company continues to assess the impact of the referendum and will update the market further on announcement of the preliminary results on July 7, 2016," Sports Direct added.
Sports Direct's financial 2016 year ended late April.
Banking group RBC also noted that Sports Direct would be particularly hit by currency movements due to it sourcing most of its own brand product in US dollars from Asia. RBC said it sees a 5% to 10% consensus earnings per share risk at Sports Direct on currency and upwards cost pressure given rising labour costs.
Shares in Sports Direct were trading down 16% at 325.40 pence on Friday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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