Lillywhites stores may be opened in the Middle East

The comments came as the firm - which owns Lillywhites and the Sports World chain - reported underlying profits of �151m for the year to 29 April.

Sports Direct was founded by entrepreneur Mike Ashley, who bought Newcastle United earlier this year.

The firm's shares have now halved in value since floating in February.

The first three months of the current financial year have been exceptionally difficult Dave Forsey, Sports Direct chief executive See Sports Direct International's share price

Sports Direct shares made their stock market debut at 300p, but since then the price has fallen steadily and by the close of trade on Monday it stood at 190p.

News of the current tough trading hit investor confidence in the firm further, and by midday on Tuesday the shares had fallen a further 43p, or 22.7%, to 147p.

'Good' profits

Sports Direct's shares had been hit in April when the firm said that UK sales had slowed.

The retailer then suffered another blow in May when chairman David Richardson left the firm, citing problems working with other directors, including Mr Ashley.

Sports Direct's chief executive Dave Forsey said the company's annual results were "good", with earnings in line with the targets set at the time of the firm's flotation.

However, he added: "The first three months of the current financial year have been exceptionally difficult with the unprecedented weather conditions having an immediate impact on sales."

The retailer has been expanding rapidly, buying Kangol, the Original Shoe Company and Streetwise in the past year. It has also recently agreed to buy boxing equipment maker Everlast for $182.3m.

The group now operates 462 stores, of which 414 are in the UK.

Its expansion is set to continue, having agreed a licensing deal which will see Lillywhites and Sports Direct stores open in the Middle East and South Africa.