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UK retailer Sports Direct cuts outlook after latest sterling collapse
October 7, 2016 / 2:37 PM / a year ago

UK retailer Sports Direct cuts outlook after latest sterling collapse

LONDON, Oct 7 (Reuters) - Struggling British retailer Sports Direct said the sharp fall in the value of the pound overnight could dent its full-year earnings forecast by 35 million pounds ($43.6 million) in the latest downgrade to its guidance.

Shares in the firm were down 9 percent at 1421 GMT, after sterling plunged overnight.

Last month Sports Direct had forecast core earnings of about 300 million pounds for its financial year ending April 2017, based on a pound/dollar rate of 1.30.

It said that in light of sterling’s recent weakness it had entered into a hedging arrangement however movements overnight resulted in a crystallisation of that rate at 1.19, resulting in a negative impact of 15 million pounds to its 2016-17 core earnings forecast.

The firm also warned that if the pound/dollar rate remains on 1.20 on average for the balance of the 2016-17 year its core earnings would be hit by a further 20 million pounds. ($1 = 0.8035 pounds) (Reporting by James Davey; editing by Kate Holton)

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