Sports Direct reports lacklustre FY figures
- FY pre-tax profit falls 8.4% to GBP275.2m (US$357.2m)
- Gross margin widens to 44.2%
- Like-for-like sales slide 0.8%
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.
For the year ended 24 April, underlying pre-tax profit fell 8.4% to GBP275.2m (US$357.2m) from GBP300.3m a year earlier. Gross margin widened slightly to 44.2% from 43.8% in the year ago period.
Like-for-like sales were down 0.8%, compared to growth of 7.4% last year, while group sales were up 2.5% to GBP2.9bn from GBP2.83bn.
"The group has delivered a disappointing full-year financial performance, impacted primarily by a tough trading environment in the second half across our sports retail businesses," said Dave Forsey, chief executive.
Sports Direct, which this year acquired the Heatons department store business in Ireland, recently found itself the subject of serious criticism regarding some of its workplace practices. Founder Mike Ashley was questioned in parliament over working conditions, and the company has also issued a number of profit warnings.
With regard to its working practices, Sports Direct says it has now put a number of measures in place to address the concerns, including an increase in pay for its UK employees. Directors are also working on developing a new incentive scheme.
Andrew Hall, analyst at Verdict Retail, notes: "The swirling market conditions and the harsh glare of the media spotlight are illuminating the cracks in Sports Direct's performance, even as it continues to invest in its multichannel proposition. There are few positives for Sports Direct to take from this morning's results, and strong leadership to right the ship is required to prevent the retailer lurching from one bad news story to another."
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