Sports Direct reports strong spring sales

The sportswear retailer said gross profit was up 13.5% to £99.8m in the nine weeks to March 25.

Sales from its retail division sales for the same period increased 16.1% to £232.6m and retail gross profit increased 15.1% to £85.4m. This does not include sales and gross profit from the newly formed Premium Lifestyle division.

In the retailer’s Interim Management Statement on February 15, the group said it is now certain of reaching its full year underlying EBITDA target, before bonus scheme costs of £225m in the year to March 2012.

The retailer said it would seek shareholder approval at its annual shareholders’ meeting for a “super stretch” executive bonus share scheme for executive deputy chairman and founder Mike Ashley.

The scheme proposes a grant of eight million shares to Ashley, two million more than previously proposed, which will vest in 2018 if he hits performance targets.

Sports Direct International chief executive Dave Forsey said he expects to see an uplift in sales as a result of the summer’s European Championships and the Olympics Games.

He said: “We remain positive about the Group’s outlook and are excited about the summer ahead with the Diamond Jubilee, Euro 2012 and the London Olympics.”

He added: “The group has continued to deliver strong growth during February and March, outperforming management’s expectations.

“This performance continues to be primarily through the UK division where online sales now represent an even larger proportion of our total retail sales than envisaged at our interim results in December 2011.”

The company will announce its preliminary results for the year to April 29 on July 19.  

Singer Capital retail sector analyst Matthew McEachran said: “Today’s IMS which covers a short 9 week period to end March shows that UK Retail performed ahead of expectations, boosted we believe by the continuing implementation of new initiatives both in-store and online, and not with much benefit from the new England strip launch.”

Conlumino senior consultant Joseph Robinson said: “Sports Direct’s continued positive performance is indicative of a retailer which has compounded external market conditions through a focus on getting the basics of the business right.

“Sports Direct has comprehensively outperformed rival specialists such as JJB Sports and Blacks off the back of building large, comprehensive ranges of established sportswear brands, at market leading prices.”