Sports Direct still on track to hit profit target

Mike Ashley saw his and his staff's bonus prospects rise. Picture: PA
Mike Ashley saw his and his staff's bonus prospects rise. Picture: PA
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Mike Ashley’s sportswear empire posted a further surge in summer sales despite tough comparisons from last year’s London Olympics.

Sports Direct International, which is controlled by the Newcastle United owner, saw sales rise 15.1 per cent to £463.7 million in the nine weeks to 29 September, down only marginally on the 18.2 per cent growth reported in the first quarter.

Gross profits rose 19.4 per cent to £199.8m and the group added trading had remained strong since the end of September, putting it on track to meet its target for full-year underlying earnings of £310m, before staff bonus payments.

The figures continue the group’s strong run that helped it earn promotion to the FTSE 100 index for the first time last month following a 70 per cent leap in its share price.

Sports Direct has been benefiting from the demise of rival JJB Sports and a recovering retail sector, as well as ongoing investment and the positive impact of a lucrative bonus scheme, which recently rewarded 2,000 staff with shares worth more than £68,000.

But it has also come under fire after it emerged that all of its 20,000 part-time staff were employed on zero-hours contracts, leaving them not knowing how many hours they would work from week to week.

Retail analyst Freddie George at Cantor Fitzgerald said Sports Direct will continue to be boosted by the lack of any close national competitor.

He added the chain was “one of the few UK retailers to have exciting prospects for its domestic business in spite of only minimal space growth”.

Its most recent nine-week figures were also boosted by a 75 per cent jump in sales of its smaller premium lifestyle unit.