Sports Direct reports Christmas sales boost
Gross profit increased 14.6 per cent to £280.7 million for the 12 weeks ending January 26th
Mike Ashley recently let it be known that Sports Direct, the company he controls, had offered 25 per cent more for Elverys. Photograph: Owen Humphreys/PA Wire
UK retailer Sports Direct, which has been seeking to be allowed into the bidding process for the Elverys Sports chain, saw shares rise sharply today as it reported an 11 per cent leap in sales.
The group, which is owned by UK billionaire and Newcastle United owner Mike Ashley, said sales for the 13 weeks ending January 26th totalled £655.4 million, compared to £589.5 million for the same period a year earlier.
Gross profit increased 14.6 per cent to £280.7 million from £244.8 million over the same period.
Sports Direct, which owns a 50 per cent stake in Heatons department store in Ireland, was the biggest riser in the FTSE 100 index in London as shares rose 7 per cent to 764pence following publication of the sales figures.
Sports Retail sales increased 6.9 per cent to £529.9 million from £495.8 million and Sports Retail gross profit increased 12.9 per cent to £230million from £203.7 million.
The group’s sales for brands such as Republic, USC and Flannels were up 52.5 per cent to £71.2million.
Sports Direct, which operates over 600 stores throughout Europe, said it expected to reach its full-year underlying earnings target of £310 million.
“Despite tougher comparisons during the period, Sports Retail continues to perform well driven by our on-going focus on exceptional quality, unbeatable value and availability,” said Dave Forsey, chief executive of Sports Direct International.
“Online also performed strongly with non-UK online gross profit contribution expected to be greater than the UK equivalent by the end of this financial year,” he added.
Sports Direct is believed to be readying itself for a joint bid with Lifestyle Sports for Elverys Sports chain. Earlier this month it welcomed the news that a temporary examiner had been appointed to the troubled chain.
The company said it is prepared to pay a 25 per cent premium for Elverys, with Mr Forsey describing the firm as “an excellent strategic fit” for Sports Direct in Ireland.
Elsewhere, Sportsdirect. com Retail, a division of Ashley’s company, is in the process of taking legal action against Heatons. Sportsdirect.com Retail is suing the Irish operation it half owns on competition grounds.