Sports Direct double boost of JJB buy-up nod and extra £5m profits
The sports clothing chain said it now anticipates underlying earnings for the 12 months to the end of April to be "at least" 160 million, up from the 155m guidance it issued at the end of 2009.
The upgrade follows a 9.4 per cent jump in high-street sales for the 13 weeks to 24 January.
Sports Direct, which has emerged as one of the few big winners during the recession, also received a boost yesterday from the Competition Commission, which gave a provisional nod to its purchase of 31 stores from its embattled rival JJB Sports.
The Office of Fair Trading had previously raised concerns about five areas where it thought competition would be reduced as a result of the deal.
However, the Commission judged that consumers were unlikely to face higher prices or a reduction in choice as a result.
Commission deputy chairman Diana Guy said: "What we have found is that the prices and range on offer in any individual Sports Direct store are not significantly affected by whether there is a nearby JJB store or not but, rather, depend on the degree of overall competition between the two at the national level."
Last year, Sports Direct introduced a share bonus scheme to motivate staff to drive up sales. Analysts said yesterday that the incentive appears to be working, as it kicks in when earnings surpass 155m.
All permanent UK staff with more than one year's service are this year likely to receive 25 per cent of base pay in shares, which vest two years later.
Andrew Wade, retail analyst at Numis Securities, said recent sales have been well ahead of expectation, although promotional activity has also been higher than normal.
Wade said: "Sports Direct traded hard through the Christmas period, delivering sales comfortably ahead of our expectations, albeit achieved by the sacrifice of some gross margin progression."
Sports Direct chief executive Dave Forsey said both high street stores and the chain's online shop have performed well. He added: "The board is pleased with the group's trading performance during the quarter."
Sports Direct's full-year results are expected to widen the gap between it and JJB, which has been dogged by a litany of woes recently, including stock shortages.
In January, JJB reported like-for-like sales fell 21 per cent, although this was an improvement on previous trading. The chain hopes its fortunes will change this year and expects to be fully stocked by April.