High street retailer Sport Direct has delivered better-than-expected results this morning, with strong online and international expansion, particularly in Europe, driving growth.
Active in 19 countries, and with 400 stores in the UK, the Slazenger and Dunlop owner has seen rapid growth over recent years, in part due to the demise of competitor JJB Sports.
At the same time as announcing results, the group said that its finance chief, Bob Mellors, is going to retire at the end of this month on health grounds. A successor is yet to be appointed.
The group, which entered the FTSE 100 in September, saw profit before tax jump 16.9 per cent form last year to £146.2m in the first half of its financial year.
Chief executive Dave Forsey said:
The board is confident of achieving at least our full year internal underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) target of £310m, before the charge for the Employee Bonus Share Scheme.
Here are three results that show how Sports Direct's strategy is paying off:
Sports Direct's European growth has been impressive. International stores have seen revenue soar over 30 per cent to £118.5m.
It remains on track with its international store opening programme, having opened one in Spain, two in Hungary and four in Poland in the period.
Purchasing other stores
The group bought retailer Republic back in February and has reported sales, when including the clothes brand, of £102.8m in the first half.
Recent acquisitions in Austria and Germany see the group reinforcing its international presence. And it continues to invest in buying while maintaining a strong balance sheet.
Excluding recent purchases, gross margin for international sports stores would have been 45 per cent.
Growing online sales
Online sales, up 43 per cent to £158m, represented 15.5 per cent of total sales in the period and bolstered growth at home, said the store. The UK saw 13 per cent growth to £903.3m.
Financial services firm Cantor Fitzgerald said after the results:
The most significant opportunity, in our view, though continues to be the development of the company’s on-line platform as [it] endeavours to be the ‘category killer’ sportswear and sports product site.
Cantor retains its full-year projection for Sports Direct of £252m pre-tax profits.
Shares have fallen by about three per cent this morning.