Sports Direct on a roll despite England failure

SPORTS retailer Sports Direct yesterday reported rising sales and profit for the last three months, despite a soft patch during England’s poor World Cup run.

The company, founded by Newcastle United owner Mike Ashley, said group sales rose 12.2 per cent for the 13 week period ending 27 July, to £711.2m, while gross profit increased 11.8 per cent to £301.2m.

While the group’s sports retail sales rose 16.3 per cent in the quarter, its premium lifestyle and brands divisions suffered.

Sales at its smaller fashion unit, which includes chains such as USC and which has undergone restructuring and store closures following the acquisition of Republic in 2013, fell 8.8 per cent, and were down 7.1 per cent at its brands division.

Chief executive Dave Forsey said: “As we highlighted at our preliminary results in July, recent trading, including the period since 27 July, has been in line with management’s expectations with some stronger weeks offset by England’s disappointing World Cup performance.

“Within Sports Retail we continue to focus on upgrading our store portfolio and integrating recent acquisitions, including Eybl and Sports Experts in Austria.

“Consistent with previous guidance we continue to target underlying EBITDA (before share scheme costs) of £360m for the current period.”

Broker Cantor Fitzgerald said in a note: 'The Q1 trading update was mixed with the company seeing a satisfactory performance from its core Retail business but disappointing results from the premium and brand divisions.'

The broker raised its full year pretax profit forecast for Sports Direct to £290m from £282m, but reduced its share price target to 760p from 800p and retained a “hold” rating on the stock.

Shares in Sports Direct yesterday closed down 1.67 per cent at 708p.