Analysts question Sports Direct positivity after earnings slump

British retailer Sports Direct has reported a 29% slump in full-year earnings after failing to hedge against a weaker pound, but its shares rose on a forecast of growth this year and hopes management was getting its house in order.

The sportswear chain, founded and run by billionaire Mike Ashley, was badly caught out by the fall in the pound after Britain’s vote to leave the EU in June last year as it sources most of its products from Asia priced in dollars.

Having failed to offset the risk of currency fluctuations for its 2016-17 financial year, the company put a hedge in place after the Brexit vote but that backfired too. It said it had now minimised the short-term impact of currency swings but remained exposed to fluctuations in the medium and long term.