Expansion boosts Sports Direct FY performance
- FY pre-tax profit up 20.5%
- Gross margin improves 110 bps
- Sales climb 4.7%
Sports Direct's FY beat management expectations
UK retailer Sports Direct International has revealed strong full-year sales and earnings, despite poor weather and falling footfall, and driven by expansion in the UK and across Europe.
Pre-tax profit for the 12 months ended 26 April increased 20.5% to GBP300.3m (US$468.5m), primarily as a result of a GBP52.1m increase in EBITDA.
Group gross margin improved by 110 basis points from 42.7% to 43.8%. Sports retail division margins increased 170 basis points to 44.6%, offsetting a drop in brands division gross margin to 40.3% from 43.1% last year.
Revenue grew 4.7% to GBP2.83bn in the year thanks to growth in the sports retail division, where sales were up 5.5%. Premium lifestyle revenues, however, fell 3%, largely due to the closure of loss-making stores in the period.
Chief executive Dave Forsey, said: "The group has delivered another solid set of results in spite of challenging trading conditions including the adverse impact on performance during the period of England’s early departure from the FIFA World Cup in Brazil and unseasonably mild weather during Autumn, reducing footfall."
For the new trading period, Forsey said the performance has been in line with management expectations and will continue to be driven by improvements in product range and availability, optimisation of both in-store and web offerings, the introduction of click and collect in the UK and further investment in the group's store portfolio.
Non-executive chairman, Dr Keith Hellawell, added: "Despite ongoing challenging market conditions, and the weather, we yet again exceeded our targets in FY15. Such success, year on year, is a testament to the hard work and dedication of all our workforce for which the board thank and congratulate them."
Jason Black, founder and director of Crep Protect, noted: "The results announced from Sports Direct paint a positive picture for sports footwear retailing, which is so far winning the battle against the rise of online shopping.
"Competitive-pricing has served them well thus far, but with online shopping able to compete with them on cost, they need to up their customer service levels and provide expertise and advice to customers to stave off competition from the Internet."
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UK retailer Sports Direct has reported what analysts say is a lacklustre set of full-year results as revenues increased only marginally and earnings tumbled....
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