Sports Direct upbeat as strong sales growth continues
LONDON Oct 23 (Reuters) - Britain's biggest sporting goods retailer Sports Direct posted a 15 percent jump in second quarter sales and said strong trading since left it confident of hitting its profit target.
In its first trading update since entering the FTSE 100 Index last month, the firm said on Wednesday group total sales in the 9 weeks to Sept. 29 had jumped to 463.7 million pounds ($752 million), with gross profit up 19.4 percent to 199.8 million.
Sports Direct, which has 400 UK stores and owns brands such as Slazenger and Dunlop, has grown rapidly during the downturn, thanks partly to the demise of rival JJB Sports, as well as acquisitions and growing online sales. It now wants a greater presence across Europe where it operates in 19 countries.
Second quarter sports retail sales rose 14.8 percent and jumped 75 percent in its smaller premium lifestyle unit, boosted by the impact of fashion retailer Republic, which it bought in February.
The firm, which had already posted an 18 percent rise in first quarter group sales, said it was confident of reaching its target of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of 310 million pounds for 2013-14, before a charge for bonus share schemes.
While many British retailers remain wary about the outlook for their businesses, a report out this month from market research specialist Verdict forecasts the sector will enjoy their best growth in Christmas sales since 2007, with consumers expected to spend at least 2 billion pounds more than in 2012.
Improving consumer confidence and job creation, and a pick-up in the housing market were some of the reasons cited by Verdict, which also said a baby boom during the recession meant there are more children to buy presents for.
Shares in Sports Direct, controlled by billionaire Newcastle United soccer club owner Mike Ashley, closed at 706.5 pence on Tuesday, up 72 percent on a year ago, valuing the firm at around 4.2 billion pounds.