Sports Direct delivered strong profits in its first quarter helped by a good performance during the World Cup, despite the very disappointing showing from the England team.
Numis analyst Andy Wade said that the sports retailer’s 12% lift in retail sales to £365m and retail gross profit rise of 20% to £167m was “considerably better” than he had expected “having previously understood that, after a strong run-in to the World Cup, sales had trailed off”.
The group’s total sales increased 8.8% to £408m in the 13 weeks to July 25 when gross profit advanced 17.8%.
The only sales decline was at the brands division, down 6.5%, but its gross profit remained flat at £18m.
Singer analyst Matthew McEachran said the profit performance was aided by “the shift towards licensing arrangements away from wholesaling - a strategy that has also helped to reduce operating costs”.
Sports Direct chief executive Dave Forsey said that the business is targeting full year underlying EBITDA of about £195m and was confident of hitting that figure.