Sports Direct scores despite World Cup flop

Sports Direct reported sales up 12.2 per cent. Picture: PA
Sports Direct reported sales up 12.2 per cent. Picture: PA

MIKE Ashley’s Sports Direct shrugged off England’s disappointing football World Cup campaign to maintain its summer sales impetus, the sportswear retailer revealed yesterday.

Sports Direct, owner of brands such as Dunlop, Everlast and Slazenger, reported sales up 12.2 per cent to £711.2 million in the quarter to 27 July. Gross profit rose nearly 11.8 per cent to £301.2m, from £269.3m in the same quarter of 2013.

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One analyst said: “It shows Sports Direct can deliver even against high-profile event headwinds.” Dave Forsey, group chief executive, said recent trading, including the period since 27 July, had “been in line with management’s expectations, with some stronger weeks offset by England’s disappointing World Cup performance”.

Forsey added that within the group’s core sports retail division “we continue to focus on upgrading our store portfolio and integrating recent acquisitions, including Eybl and Sports Experts in Austria”.

The business, controlled by Newcastle United FC owner Ashley, recently reported a 16 per cent jump in profits to £239.5m for the year to 27 April. Underlying earnings were £331m in the last financial year and Sports Direct reassured investors yesterday that it remained on track to see this figure grow to £360m.

The main sales progress came from the company’s retail stores after its brands division posted a drop in revenues of 7 per cent in the quarter.

The latest strong performance came as nearly 15 per cent of shareholders failed to back Sports Direct’s remuneration policy at the annual meeting in Shirebrook, Derbyshire following long-running controversy about the bonus scheme and the use of zero-hours contracts for store employees.

Shares in the group ended the session down 12p, or 1.7 per cent, at 708p yesterday.

However, many analysts remain confident of the company’s future prospects after its long run of successful trading. Jonathan Pritchard, at Oriel Securities, said there had been some concern recently about gross margins at the company, but added: “If they can invest in store standards and click-and-collect, prospects are good.”