You just can’t please some people. Mike Ashley’s sports retailing firm Sports Direct has announced a rise in profits and sales yet again in an interim management statement today, but in mid-morning trading the share price had dropped 1.7% to 708.
Admittedly, the firm’s 12.2% annual revenue rise (to £711.2m over the quarter to July 27th) and 11.8% boost to gross profits (to £301.2m) were notably less impressive than previous results, but then there’s a pretty solid explanation for that.
‘Recent trading,’ said Sports Direct chief executive Dave Forsey, has been in line with management’s expectations with some stronger weeks offset by England’s disappointing World Cup performance.’
Presumably, the kids haven’t been queuing up to buy Germany shirts. So much so expected. Perhaps investors’ moodiness is down instead to the decline in profits and sales of the firm’s snazzy Brands and Premium Lifestyle divisions – sales in the former decreased 7.1% to £47.3m in the period, and in the latter by 8.8% to £52.1.
But those two divisions are still dwarfed by the less glamorous but still well-performing Retail division. Could it be then that shareholders still aren’t happy with ‘executive deputy chairman’ (read: de facto boss) Ashley, who in July turned down his share in a £200m employee bonus scheme after fighting them for it in the first place? Indeed, Sports Directs’ results after that scrap were even better, and yet the share price fell even faster.
Whatever the reason and whatever happens to the shares, the results are still good news for company employees, who can look forward to their share of the extravagant bonus scheme if the firm continues to perform so well. No wonder they're always smiling.