Some rare good news from Sports Direct today: Mike Ashley’s sportswear retailer reported a better-than-expected 12% jump in sales for the three months to the end of January. OK, so profit margins are lower than expected (40%, rather than 45%), and its expected annual profit of £135m is about 30% lower than when it was a private company. But at least its revenues are headed in the right direction. And even more remarkably, the irascible Ashley has even promised to start giving up some more detailed financial information about how the company is doing...
In a statement, the retailer said that higher sales were offset to some extent by the weakness of the pound, which has increased import costs (which it mostly pays in dollars – whoops) and taken a chunk out of margins. But despite closing 18 stores and only opening 12 new ones, overall sales were still up. CEO Dave Forsey said the UK arm had benefited from ‘specific management focus’, suggesting that the combination of ‘great value’ and good stock control was largely responsible for the upturn. And it’s presumably true that its cheap and cheerful offering could prove popular when money is tight.
It’s fair to say that Sports Direct’s relationship with the stock market hasn’t been a happy one. Since floating at 300p, earning Ashley nearly a billion quid in one day, its share price has plummeted amid tumbling sales and a series of profit warnings (it’s currently hovering around the 60p mark). Ashley has also treated the City with barely-concealed disdain, firing his PR firm, falling out with his chairman, ignoring shareholder niceties and calling analysts a ‘bunch of cry babies’. And he’s only supplied the bare minimum of detail about the group’s finances – notably, he’s always refused to give like-for-like sales figures, usually on the grounds that any comparisons are pointless for years when there’s no big football tournament to boost numbers.
But perhaps the maverick entrepreneur is mellowing. Today’s typically terse results statement didn’t bode particularly well, but a spokesman apparently said later that from July (when it is due to report its figures for the full year), Sports Direct will start releasing the kind of detailed information the City has been demanding since flotation – including like-for-like sales figures.
We have no idea what lies behind this sudden change of heart – unless perhaps Ashley’s less-than-successful ownership of Newcastle United has persuaded him that he’s better off sticking to what he knows, and making sure that at least one of his investments turns a decent profit...
In today's bulletin:
Cricket hit for six as Stanford faces fraud charges
Starbucks boss puts Mandelson in a flapuccino
Ashley promises figures as Sports Direct sales jump
Mobile phone companies on the charge
Twitter investment gets tongues wagging