Sports Direct sales on the rise despite woeful England

Published on Monday 6 September 2010 21:59

Sales at Sports Direct, Britain's biggest sporting goods retailer, were up 9 per cent in its latest quarter, with the World Cup providing a stimulus to trade despite England's woeful performance in the tournament.

The chain, in which Newcastle United owner Mike Ashley has a 71 per cent stake, yesterday said sales rose to 408 million in the 13 weeks to 25 July, up from 375m in the same period last year. Gross profit increased 17.8 per cent to 185m.

"Despite the performance of the England team during the World Cup, these results clearly show that Sports Direct had a good World Cup," the group told investors.

England, third-favourites to win the competition, were thrashed by Germany in the first knock-out stage.

Sports Direct, which owns Sports World and Lillywhites stores as well as brands including Slazenger, Lonsdale and Dunlop, said that since the end of July its performance had remained strong and in line with management expectations.

It added that it was maintaining its target of underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of about 195m for the year to end-April 2011, up from the 160.4m generated in 2009-10.

Matthew McEachran, an analyst at Singer Capital Markets, said: "There has been a stronger-than-expected gross margin performance, in spite of there being some clearance activity on World Cup product, which is ongoing, following the early exit by England."

Sports Direct fared better than most UK retailers during the recession thanks to its discount pricing and the weakness of its main rival JJB Sports, which came close to going into administration in 2009.

An industry survey yesterday showed UK retail sales growth accelerated last month, helped by clothes sales, but discounting played a part in the improvement and consumers remain reluctant to splash out.