Mike Ashley’s Sports Direct on target but sales growth slows
The figures
Shares in Sports Direct rose two per cent in early trading as it announced sales and gross profits had risen across the Christmas period – up 2.6 per cent to £771m and 7.6 per cent to £346.9m respectively.
However, that was a slowdown compared to the same period last year, when sales grew 11 per cent.
The sports retail side of the Mike Ashley-owned business experienced a 2.6 per cent increase in sales and 9.4 per cent increase in profit.
However, sales at the retailer's premium lifestyle division, which includes USC and Republic, were largely flat at 0.4 per cent, while profit fell 2.8 per cent to £27.6m.
Profit at the retailer's brands division also slipped slightly, down 0.9 per cent to £22.1m on sales of £56.9m, which were up 4.8 per cent.
Why it's interesting
The retail empire, 58 per cent owned by businessman Mike Ashley, has had its ups and downs, with fast fashion chain USC going into administration at the beginning of the year, only to be scooped up by Sports Direct's other fast fashion chain Republic.
Sports Direct has also expanded its reach after buying up a share of Debenhams which has given its sports goods exposure in the high street department store.
What Sports Direct said
Chief executive Dave Forsey had this to say:
As we highlighted at our interim results in December, trading has been in line with management's expectations. Within Sports Retail we continue to focus on upgrading our store portfolio and integrating our business in Austria where a weak winter sports season across Europe has proved challenging.
While we retain the ability to invest in margin, inventory and group marketing to deliver long term sustainable growth, the board is very confident of achieving at least our full year internal underlying EBITDA target of £360m, before the charge for the employee bonus share schemes.
In short
Sports Direct is about to hit the back of the net, with full-year profits on target to hit forecasts. But investors will be keeping their eye on the ball when it comes to the pace of growth.