Sports Direct profits up 9.8% despite England's early World Cup exit

In the 26 weeks to October 26, group sales were up 6.5% to £1.4bn. Sports retail sales were up 8.3%, but sales in the Brands division fell 3.9% due to a decline in wholesale sales.

Underlying profit before tax was up 9.8% to £160.6m, and group EBITDA increased by 10.8% to £203.1m.

Sports Direct chief executive Dave Forsey said: “The results for the six months were solid considering the adverse impact on performance during the period of England’s early departure from the FIFA World Cup in Brazil and the unseasonably mild weather during autumn reducing footfall.

“However, the continued growth in group revenues and EBITDA is testament to the hard work of our colleagues and our continued focus on providing customers with exceptional quality and unbeatable value. We are delighted that their contribution will again be recognised under the 2011 Employee Bonus Share Scheme - 25% of which is expected to vest with eligible employees in September 2015.”

Speaking to Retail Week, Forsey said that he was feeling confident about the crucial Christmas trading period. “It kickstarted [early] with Black Friday and Cyber Monday weekend, which boded well for us. I think it’s going to be a good Christmas from a sales perspective across the sector. I’m confident it’s going to be a good Christmas [for Sports Direct].”

Like Marks & Spencer, River Island and Debenhams, Forsey said the sports and fashion business was also struck by overwhelming customer demand over Black Friday. “I think anyone that says they didn’t have any issues with service wouldn’t be telling the truth and we’re not excluded from that. You can’t have that level of volume [and not be impacted]. Of course, we’re very quick to learn from it and work out the best solution for the medium and long term.”

Earlier this month, Sports Direct opened its first store within Tesco, with a unit in Tesco Extra store in Leigh, Greater Manchester. Forsey said the retailer will “definitely continue to grow the number of stores within Tesco shops where we have the opportunity and they come up with idea”.

Forsey said “trading since the period end has been in line with management expectations and while we retain the ability to invest in margin, inventory and group marketing to deliver long-term sustainable growth, we remain confident of achieving at least our full year internal underlying EBITDA target of £360m, before the charge for the Employee Bonus Share Schemes”.