If the sparks go all the way around the copper strips, also called the commutator, the armature has shorted. That means the insulation between the wires and the iron has broken down in the inside of the armature. Some times it can be as simple as a short between the bars, the copper strips, of the commutator.
With the tool unpluged, use an air hose with an air nozzle to blow any trash or dust from the area around the brushes and the communator.
If that does not improve the symptoms the next thing is, with the tool unpluged, remove the brushes, often a screw on cap hold them in, and inspect and compare the length. A short length will cause the springs to not put enough pressure on the carbon to make good contact with communtator. In that case, replace the brushes. Also check the freedom of movement of the brushes. If dirt jams the channel the brush slides in, the spring can't push the carbon tight to the commutator.
Good luck!
This repair will work on other hand-held power tools.