Why Manchester United shares are losing today

British football (er, soccer) club stock. Manchester United (HAND -5.06%) was down 7.9% by 10:45 a.m. ET Wednesday after reporting massive losses in the final quarter of fiscal 2024 this morning.

Overall, revenue for Q4 fell 15% to £142.2 million ($185 million), leading to staggering losses on the bottom line.

Manchester United’s T4 wins — and by wins we mean losses

How bad was the news? Q4 net losses rose 1,152% to £36.3m ($47.2m). Operating losses increased by 10,700% year-on-year.

As this is the last quarter of the year, we should probably record the full 2024 results as well, painful as that may be. In the 2024 financial year, Manchester United reported revenue growth of just 2.1% (£661.8m). Its losses for the year amounted to £113.2m, almost four times the loss incurred in 2023.

Given how poor the numbers were, it’s no surprise that CEO Omar Berrada preferred to focus on the entertainment aspects of the quarter, talking gleefully about how his club had run “successful training camps”. added “five exciting players” to its men’s team and “six players to our women’s team” in the quarter, before belatedly acknowledging that it was evident and promising that it was “working towards greater financial sustainability” of the business.

Are Manchester United shares a buy?

And how does he plan to do that? Turning to guidance, Berrada has forecast revenue of between £650m and £670m for fiscal 2025 — which in the middle actually implies another drop in revenue next year, not an improvement. In terms of profits, the most he would say is that Manchester United will target “adjusted” earnings before interest, tax, depreciation and amortization (EBITDA) of between £145m and £160m.

This represents some improvement over the £147.7m adjusted EBITDA reported in fiscal 2024. But the number is a far cry from generally accepted accounting principles (GAAP) earnings, and investors probably shouldn’t rely too heavily on him to decide whether Manchester United Shares are a buy.

Until this sports stock starts earning some honest-to-goodness GAAP profits, it just isn’t.