Sports Direct Rises as Full-Year Target Is Confirmed
Sports Direct International Plc, the U.K.’s biggest sporting-goods retailer, rose in London trading after the company said it expects to meet its full-year profit target even as cold weather hurt rival JJB Sports Plc’s sales.
Sports Direct said it anticipates meeting forecasts for earnings of 205 million pounds ($319.5 million) before interest, taxes, depreciation and amortization, excluding one-time items. Sports Direct climbed as much as 6.2 percent after it said first-half profit rose 77 percent, led by soccer World Cup merchandise.
“The perfect weather is always cold and clear,” Chief Executive Officer Dave Forsey told reporters on a conference call. “We don’t want the snow and ice, but cold and clear is always best for demand.”
Sports Direct sold more winter coats, boots, scarves and hats in the cold, he said. In contrast, JJB Sports said Dec. 2 that sales were below projections and conditions were likely to be worsened by freezing weather.
Sports Direct gained 4.5 pence, or 3.1 percent, to 150.5 pence. The shares have increased 54 percent so far this year, giving the company a market value of 867.7 million pounds.
Sports Direct said it’s setting its Ebitda target for employee bonuses at 250 million pounds for fiscal 2013.
Sports Direct, controlled by Newcastle United soccer club owner Mike Ashley, said the World Cup added as much as 20 million pounds to Ebitda. The company’s best-ever day came when England played the U.S. during the tournament, it said today.
Sports Direct is seeking to expand in the 17 countries which use the euro within five years. It currently has 394 U.K. outlets and 67 overseas in countries including Belgium and Slovenia.
Forsey said it may expand abroad by acquisition, joint venture or adding new outlets.
Net income climbed to 69.1 million pounds, or 11.43 pence per share, in the 26 weeks ended Oct. 24, from 38.9 million pounds, or 6.46 pence per share, a year earlier, the Mansfield, England-based company said in a statement.
To contact the editor responsible for this story: Colin Keatinge in London at Ckeatinge@bloomberg.net