Sports Direct share price falls despite revenue rising 4.7 per cent
The figures
Shares in Sports Direct fell 0.48 per cent to 731p per share in early morning trade.
The company said group revenue rose 4.7 per cent to £2.83bn in the year to April 2015, from £2.71bn in 2014. It was helped by its "sports retail" and "brands" sectors, which rose 5.5 per cent and 4.1 per cent respectively. However "premium lifestyle" lagged as revenue fell by three per cent.
Meanwhile underlying profit before tax rose 20.5 per cent to £300m, up from £249m a year earlier.
At the same time, the sports retailer lowered its earnings with interest, taxes, depreciation, and amortization – a measure of profitability – target from £480m to £420m.
Why it's interesting
The Mike Ashley-owned retailer was forced to soldier on without a chief financial officer for much of the year, after and it also raised eyebrows after buying stakes in Debenhams and Tesco. And that came on top of England's early exit from the Fifa World Cup in Brazil and warm weather which discouraged high street shopping.
But the cut-price chain's appeal has been boosted by endorsements from musicians such as Skepta who recently told Hypebeast "when I’m in the States, I’m fully kitted in Air Max, tracksuits and a curved peak. I come through with my Sports Direct and JD Sports swag".
Earlier this year Sports Direct came under fire for its use of zero-hours contracts which don't guarantee employees work – but today it hit back saying the criticism it received was "unfounded and inaccurate".
"We comply fully with all legal requirements which relate to casual workers, including sick pay, holiday pay, and freedom to gain other employment. Casual workers also participate in general incentive schemes."
What Sports Direct said
Dave Forsey, chief executive, said:
The group has delivered another solid set of results in spite of challenging trading conditions including the adverse impact on performance during the period of England's early departure from the FIFA World Cup in Brazil and unseasonably mild weather during Autumn, reducing footfall.
However, with our ongoing focus on providing customers with exceptional quality and unbeatable value, we have continued to grow group revenues and earnings with interest, taxes, depreciation, and amortization.
Trading since the period end has been in line with management expectations and will continue to be driven by improvements in product range and availability, optimisation of both our in-store and web offerings, the introduction of click and collect in the UK and further investment in our store portfolio.
In short
Sports Direct shrugged off England's early exit from the Fifa World Cup, as well as warm weather which has afflicted much of the high street, to post a revenue increase of 4.7 per cent in the year to April 2015. However, it also lowered its target for earnings with interest, taxes, depreciation, and amortization in 2016.