Perhaps it’s down to coming to the end of a year which included an Olympic summer and the glimmer of hope that a Brit might have won Wimbledon. Sports Direct announced on Thursday that pre-tax profits in the 13 weeks leading to 27th January grew almost 23% to £244.8m. The period is the third quarter on the firm’s financial calendar, and it said that total sales also rose 21.1% to £589.5m.
Sports Direct is the parent company of SportsDirect.com, Lillywhites sportswear stores and also Slazenger and Dunlop, so it has a significant roster of brands that it has evidently cashed in on over the Christmas trading period.
The result is surprising given that other British retailers have been having a shocker: HMV, Jessops and Blockbuster have all hit the buffers in the last six weeks. Other retailers have been suffering depressed consumer demand, rising business rates and further erosion from online-only retail companies.
Still, chief executive Dave Forsey said Sports Direct is ‘certain’ of meeting its target for the full-year: underlying EBIDTA (earnings before interest, tax, depreciation and amortisation) of £270m for 2013.
The firm puts a lot of its success down to extremely well motivated staff – it runs a generous bonus initiative – and continuing expansion into European markets. It has also been pushing its online retail arm hard, and no doubt has benefited from the demise of major competitor JJB Sports, which called in the administrators in September last year.
In fact, the firm feels it is doing so well, that in December it announced plans to give Mike Ashley, its billionaire founder, 10 million shares as a performance-related bonus if financial targets were met.
But despite last year’s baying over executive pay, shareholders are obviously happy with how the firm is doing: the price of shares is up 43% compared with a year ago, giving the firm an implied value almost £2.5bn.