February 19, 2014 / 9:27 AM / 4 years ago

UPDATE 1-Sports Direct on track after solid Christmas quarter

LONDON, Feb 19 (Reuters) - Britain’s biggest sporting goods retailer, Sports Direct, posted a 14.6 percent rise in profit in its Christmas quarter and said it was confident of hitting its full-year target.

The group, with over 600 sports stores in Europe including 400 in the UK, said on Wednesday gross profit for the 13 weeks to Jan. 26, its financial third quarter, rose to 280.7 million pounds ($469 million), up from 244.8 million a year before.

Shares in Sports Direct, controlled by billionaire Newcastle United soccer club owner Mike Ashley, rose 5.4 percent to 754.5 pence at 0840 GMT, making it the biggest gainer in the FTSE 100 index of blue-chip shares.

“Last time the company reported the City was disappointed by slower trading and the lack of an upgrade, but that will hopefully keep people happy,” retail analyst Nick Bubb said, referring to Sports Direct’s trading update in December.

Then the firm had been less bullish than usual on the strength of trading after exceeding its expectations in the first half.

Sports Direct, which entered the FTSE 100 index in September, has grown rapidly during a downturn through a mixture of popular cheap offerings, acquisitions, online growth and the demise of rivals like JJB Sports. It now wants to expand across Europe where it operates in 19 countries.

Total sales rose 11.2 percent to 655.4 million pounds in its third quarter, including a 6.9 percent rise in its core sports retail division. Sales in its fashion arm, which has around 160 stores under names including USC and Cruise, rose 53 percent.

The firm said it was very confident of at least achieving 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.

Sports Direct gave no update on its plans to strike a partnership with British department store Debenhams, which could entail the sports firm’s goods being sold in its stores.

In January, Sports Direct bought and then promptly sold a stake in Debenhams, replacing it with an option that could see it buying a 6.6 percent stake next year, and has been in talks to work with the department store on an operational level.

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