Market watch: Sports Direct’s figures buoyant ahead of Olympics

THE retail sector’s battle against the weather and economic conditions will be in sharp focus this week when B&Q, Halfords, Mothercare and Sports Direct International post figures.

Mike Ashley’s Sports Direct group is set to inflict more pain on rival JJB Sports on Thursday when it reveals buoyant trading in the run-up to the Olympics.

The group, which has nearly 400 stores and owns brands including Donnay, Karrimor and Slazenger, is thought to have grabbed a bigger share of its market with the help of an aggressive promotional campaign. Its figures will be in contrast to rival JJB, which recently issued a profits warning after saying it had failed to gain the boost it expected from the Euro 2012 championships.

Oriel Securities analyst Jonathan Pritchard said: “JJB’s recent profit warning may be more of a reflection on Sports Direct’s aggression on price than on the underlying conditions.”

He expects the figures to provide further evidence of “sales-led profits growth of the highest order”.

The strong performance would mean the chain has hit an earnings target of £225 million for the year, putting executive chairman and Newcastle United owner Ashley on track to receive eight million shares – currently worth around £24m.

The pressure on Halfords to get its performance back on track is set to intensify after the dire weather hit sales of bikes and other leisure 
products.

The group, which has 467 stores in the UK and Ireland, has seen its share price almost halve over the past year as high petrol prices cause motorists to use their cars less, hitting demand for car maintenance products.

B&Q, hit hard by the wet weather over Easter as homeowners put DIY and gardening projects on hold, is likely to confirm tough trading in the second quarter on Thursday.

Week ahead

Monday: SThree

Tuesday: IG

Wednesday: BHP Billiton, Land Securities, London Stock Exchange

Thursday: Halfords, Kingfisher, Sports Direct International

Friday: Vodafone