Mike Ashley’s pride and joy (Newcastle United notwithstanding, of course) said in a brief statement today that it made profits of £126m during the 11 weeks to 13 January, on sales of £280m. However, as usual the retailer didn’t release any comparable figures, so nobody has any idea whether this is better or worse than last year. Though you can probably have a pretty good guess…
As usual, the retailer painted a less-than-optimistic picture of the outlook for the coming year. The UK trading environment would become ‘increasingly difficult over the next six months’, CEO Dave Forsey said this morning. England’s myriad football failures of 2007 were a particular hammer blow, because it means Ashley won’t be able to flog as many over-priced replica kits next summer.
That said, by its own standards – it’s already issued three profits warnings in less than a year as a public company – Sports Direct was relatively upbeat about its finances. Forsey said it remained confident about beating profit forecasts for the year as a whole, thanks to ‘the resilience of our business’ – although since these forecasts have been repeatedly revised downwards since the flotation, it’s not exactly a high bar.
However, it’s not all doom and gloom for Ashley’s long-suffering shareholders. Rival JD Sports has been making money hand over fist in recent months, so there clearly is custom out there for sportswear retailers if they get their offering right. And if consumer spending does slow, it’s possible that Sports Direct – like Woolworths – will benefit from being a ‘value’ (i.e. cheap and cheerful) retailer.
In a month when he’s tried to plant the seeds of recovery at Newcastle by appointing Kevin Keegan, Ashley will be hoping that these latest figures finally represent some green shoots of growth. And if not, he can always just flog Michael Owen to the highest bidder and buy back a few more shares.