Sports Direct, the controversial retailer run by the billionaire Mike Ashley, has emerged with a near 4 per cent stake in Umbro, the England football kit retailer that issued a surprise warning on profits last week.

It came as Sports Direct insisted that it was on track to hit market expectations this year despite “difficult” trading on the high street over the summer.

Umbro, which admitted last week that as many as one million England strips could be stuck on its shelves, told the stock market that Sports Direct owned a 3.87 per cent stake.

It raised the prospect that the acquisitive Mr Ashley, who also owns stakes in adidas, might be mulling over a prospective bid for the company.

A spokesman for Sports Direct did not immediately return calls seeking comment.

Dave Forsey, the Sports Direct chief executive, said that the group, which runs the Sports World and Lillywhites chains, was sticking by guidance given in July when it forecast “limited” growth in earnings this year.

In early trading, shares in Sports Direct rose 6.5p to 142.4p, still less than half the value at which the company made its debut on the London Stock Exchange in February.

However, Mr Ashley risks another dispute with the City after the group refused to divulge like-for-like sales figures for the past four months, nor any comparison with trading a year ago.

In a statement ahead of today’s annual meeting, it revealed only that total sales in the 13 weeks to 29 July were £335 million with gross profit at £149 million.

The group also failed to provide any update on the search for a non-executive chairman — a move seen as critical to repairing Mr Ashley’s fraught relationship with institutional investors.

Sports Direct shares have more than halved since floating at 300p in February, when Mr Ashley pocketed £929 million.

City analysts had feared a third profit warning of the year from the group today, given the torrential rain in June and July and the warning from Umbro, the sportswear firm, last Thursday.

Mr Forsey reiterated that the wet weather this summer had had a "material" effect on business but added: “Since the end of July trading has improved, but market conditions remain difficult.

“At the time of the announcement of its preliminary results on 24 July, the company stated that its pre-exceptional ebitda for 2007-08 should show limited growth from the results reported in the year to April 29, 2007. We remain of that view.”

He added: “We remain committed to the strategy of improving retail margins, driving efficiencies and growth through acquisitions, opening new retail space and licensing opportunities.”

Analysts are expecting Sports Direct to report earnings of around £190 million this year, against £176.3 million.

Nick Bubb, a retail analyst for Pali International, said there was still a possibility of a profits warning at Christmas, when the group is due to report its half-year figures.

He added: "Infuriatingly, there is no detail on performance with today's trading update. They have given a total sales figure for Q1, with no comps and no gross margin percentage, again with no comp.

"The only clue is the comment that the weather has improved since the end of July, but as trading conditions remain 'difficult' there is every chance of another downgrade with the interims at Christmas."

The group today said it had spent £62.6 million on share buybacks in the past four months, as well as £30 million on an office in London. It has also spent £262 million on stakes in Adidas and Helsinki-based Amer Sports.

Pirc, the corporate governance advisory body, last month urged investors to protest at Sports Direct's agm over executive pay. It said that targets attached to long-term incentive plans were “not sufficiently challenging”.

Pirc added that bonuses of £5 million each paid to directors — which were set out before the IPO seven months ago — should not have been awarded.

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