Sports retail group Sports Direct has today reported a 10.2 per cent rise in gross profits during its last financial quarter to total £184.4 million .
Group sales increased by 9.1 per cent in the 13 weeks to January 22nd 2012, with retail sales up an impressive 10.2 per cent compared to the same period last year.
The retailer’s brand division saw revenues drop 1.7 per cent over the quarter but corresponding gross profit still saw an uplift, rising 7.8 per cent to £19.4 million.
Following such a strong performance the company’s board now anticipates that Sports Direct will reach both its full-year underlying EBITDA target of £215 million and its “super stretch” scheme target of £225 million announced in December.
Dave Forsey, CEO of Sports Direct, commented: “The Group has had a strong third quarter and experienced significant growth in its ecommerce division. Underlying performance in the period, particularly since December, has outperformed management’s expectations.
“Trading has continued to remain strong since the end of January and we shall continue to invest in margin, inventory and extra group marketing.
Sports Direct has been rationalising its UK store portfolio over the quarter, closing six stores while opening four more, and has also increased its European presence with three new shops in Portugal, and one in Cyprus.
In July last year the retailer unveiled an unprecedented bonus scheme which will see around 2,000 staff members receive 75 per cent of their base pay in shares of £1.25 over the next two years as reward for the continued success of the business
Lead Consultant at retail analyst group Conlumino Matt Piner argues that Sports Direct has been able to outperform competitors such as JJB Sports & Blacks because it has hit on a magic formula of large ranges, established brands and low prices.
“Having made its name as a value player, Sports Direct is now slowly developing credibility as a specialist,” Piner said.
“Large ranges and the addition of premium brands have helped it build authority; but, perhaps most importantly, it’s generous bonus scheme and increasing focus on training are reducing staff turnover.
“This will be a longer term win but will help ensure that the momentum Sports Direct currently boasts is successfully built upon.”