Sports Direct’s retail sales soared 13.8% during its third quarter as it continued to win market share at JJB Sports’ expense.
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Retail sales reached £371m in the 13 weeks to January 23 and gross profit grew 9.6% to £149m. Sports Direct’s brands division recorded a sales increase of 2.2% to £46m.
Oriel Securities analyst Jonathan Pritchard said: “It’s clear that market share is being won here and, with the competition struggling, we think it is a trend likely to continue.”
Pritchard said the sportswear retailer’s EBITDA target of £205m for the year ending was “largely in the bag” and he now forecasts £225m excluding payment of the retailer’s incentive scheme.
Sports Direct chief executive Dave Forsey pledged to invest in margin and extra marketing during the final quarter. The retailer made its first foray into TV advertising during the last quarter.
Pritchard said: “We think that this is a very wise move, especially as 2011 is a [footballing] non-tournament year and the April to May comparative is tough. It certainly does not seem as though JJB’s travails are causing Sports Direct to rest on its laurels.”
Sports Direct has also cut its debt. The retailer said in December it had a net debt to underlying EBITDA of 1.2 times. This will now be below EBITDA by the year-end.