Online boosts Sports Direct as sales jump 14.6%
Sports Direct says it is on course to hit its full-year profit target without increased investment in marketing, margin and inventory.
By Sarah Vizard
Total sales for the 13 weeks to 26 January were up 11.2 per cent to £655.4m, with store sales up 6.9 per cent to £529.9m. Sales for Sports Direct’s fashion brands, including Republic, USC and Cruise, rose 52.5 per cent to £71.2m.
The retailer says that while it could increase investment in marketing to boost growth, it will hit its full-year profit target of £310m without doing so. It’s gross profit for the 13 weeks increased 14.6 per cent to £280.7m. While Sports Direct does invest in price, it spends relatively little on advertising.
Dave Forsey, chief executive at Sports Direct, says: “Despite tougher comparisons during the period, Sports Direct Retail continues to perform well driven by our on-going focus on exceptional quality, unbeatable value and availability.
“While we retain the ability to invest in margin, inventory and group marketing to deliver long-term sustainable growth, the board is very confident of achieving at least our full year internal EBITDA target of £310m.”
Sports Direct has seen strong growth in recent years on the back of online growth, acquisitions of brands Lillywhites, Donnay and Dunlop and the demise of rivals including JJB Sports. It has 400 stores across the UK and operates in 19 countries across Europe, with plans to expand further across the continent.
Sports Direct gave no update on plans to sign an agreement with Debenhams that could lead to the firm’s brands being sold in the department store. Reports from the Financial Times suggest the two firms met for the second time this week to talk about a possible partnership.
Last month, Sports Direct bought and then sold a 4.6 per cent stake in Debenhams, replacing it with an option to buy shares worth 6.6 per cent of the department store next year.
Read our Brand Audit of Sports Direct.
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