Sports Direct is preparing for further international expansion after profits soared last year.
Oriel analyst Jonathan Pritchard expects international operations to become a much bigger part of Sports Direct’s business as it expands further into Europe.
Pritchard said: “With 10% to 15% growth in square footage in Europe likely in the next few years, growth in earnings could be usefully assisted from this source.”
The retailer now has 79 international stores in seven countries. Sports Direct chief executive Dave Forsey said it has set “aggressive targets” for expansion and intends to be in all 17 Eurozone countries in the next five years.
Last week Sports Direct reported preliminary underlying pre-tax profit up 32.7% to £135.5m.
Like-for-likes in the overseas business climbed 9% in the year to April 24 and the retailer’s total sales rose 10.2% to £1.6bn in what Forsey described as the one of the toughest consumer environments he has ever experienced.
Sports Direct’s retail division spearheaded the growth with a sales advance of 11.9% to £1.4m. UK retail like-for-likes climbed 6.6% in the year.
Sports Direct has extended its employee incentive scheme for the next four years. The scheme, under which employees will bank over £40,000 over the next two years after it hit EBITDA targets this year, will pay out again in 2015 if Sports Direct makes EBITDA of £300m that year.
Pritchard expects Sports Direct’s newly-established premium lifestyle division, set up following the acquisition of 80% of USC and Cruise Clothing earlier this month, to “add stores rapidly under a number of fascias”, but Forsey refused to be drawn on plans.
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