Profits soar 14% at Sports Direct
Sports Direct hailed its latest results as another success but has stayed resolutely silent over negotiations with Debenhams to stock its products at the department store.
Bosses at the retail chain owned by billionaire businessman Mike Ashley said sales jumped 11% to £655.4m in the 13 weeks to the end of January, with gross profits up 14.6% to £280.7m on a year earlier.
The shares rose 44.5p, or 6%, to 759.75p. Independent retail analyst Nick Bubb said: "Last time the company reported, the City was disappointed by slower trading and the lack of an upgrade, but [today's results] will hopefully keep people happy."
The company is still on track to hit full-year underlying profit targets of £310m, which keeps massive windfalls to the top 10% of managers – although the business has been criticised for employing staff on zero-hour contracts.
Chief executive Dave Forsey said: "Despite tougher comparisons during the period, Sports Direct continues to perform well, driven by our focus on exceptional quality, unbeatable value and availability."
Forsey added that online is performing particularly well overseas with sales across its foreign business, based in Austria, Germany and the Baltic regions among others, expected to overtake the UK equivalent.
The sports retail division's sales rose 6.9% to £529.9m, with profits up 12.9% to £230m, while the brands part of the business, including Slazenger, Donnay and Everlast, was up 15.5% to £54.3m.
But there was no update on a deal with Debenhams, with Sports Direct betting with an unknown third party that the department store's share price will drop while also holding negotiations with Debenhams bosses over stocking Sports Direct's fashion brands.
Few shareholders at Sports Direct and Debenhams have spoken out over the deal, with many larger shareholders owning stakes in both companies.