LONDON, July 20 (Reuters) - British retailer Sports Direct on Thursday reported a 28.5 percent slump in full-year core earnings, reflecting a lower gross margin due to the weaker pound and a lack of hedging.
The sportswear chain, founded and run by billionaire Mike Ashley, said it remained exposed to medium/long term currency fluctuations.
Sports Direct was badly caught out by the fall in the pound which followed Britain’s vote to leave the European Union in June last year.
The group sources most of its products from Asia in dollars but was not hedged for the 2016-17 year before the Brexit vote and then erred with a belated hedge.
The group made underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of 272.7 million pounds ($355.2 million) in the year to April 30.
That compares to Sports Direct’s guidance of about 265 million pounds issued in December, and 381.4 million pounds made in 2015-16. ($1 = 0.7677 pounds) (Reporting by James Davey, Editing by Paul Sandle)