Sports Direct has posted a drop in interim profits despite what boss Mike Ashley describes as a “spectacular trading performance” across its flagship stores.
The sporting goods retailer recorded a 67.3% slump in pre-tax profits year on year to £45.8m in the 26 weeks to October 29 as UK retail sales slipped 1% to £1.1bn.
The retailer attributed its UK sales fall to a slowdown in online promotional activity and store closures associated with “the continued elevation” of its store portfolio.
Group revenue was up 4.7% overall to £1.7bn, driven by a 4% and 65% rise in its international sports retail and premium lifestyle divisions respectively.
The sports fashion and equipment retailer’s stakeholders voted against founder and boss Mike Ashley’s brother receiving an £11m pay-out earlier this week, and chairman Keith Hellawell said in today’s financial update that the board would “move on” as a result.
Despite notching up hefty declines in pre-tax profit at the interim mark, the retailer still expects its underlying full-year EBITDA to rise between 5% and 15% year on year.
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Ashley said: “Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between 10 and 20 new flagship stores next year.
“While our reported profit before tax has been impacted by fair value adjustments and transitional factors such as the disposal of assets in the 2017 financial year; our underlying profit before tax remains healthy.
“We will continue to invest for the long term and our net debt has increased in line with management expectations.”