Sales rise boosts Sports Direct

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RETAIL chain Sports Direct International gave a boost to its share price today after revealing sales jumped 11 per cent in the 13 weeks to the end of January.

The group, which has 409 stores in the UK and also operates in 19 other countries, achieved revenues of £655.4m in the quarter as gross profits increased 14.6 per cent to £280.7m.

The update helped shares open more than five per cent higher as investors backed the chain following disappointment over half-year results in December.

The company, which is controlled by Newcastle United owner Mike Ashley, remains on track to meet its full-year underlying earnings target of £310m.

Chief executive Dave Forsey said: “Despite tougher comparisons during the period, Sports Retail continues to perform well driven by our ongoing focus on exceptional quality, unbeatable value and availability.”

Online performed particularly well, with overseas sales expected to exceed the UK equivalent by the end of the current financial year.

Sports Direct achieved promotion to the FTSE 100 Index in September following a 70 per cent leap in its share price.

The company believes much of its success is down to the positive impact of a lucrative bonus scheme, which last year rewarded around 2,000 staff with shares worth more than £68,000.

Today’s performance should keep the company on track to meet targets under a new four-year bonus scheme, due in the summer of 2015.

Its brands arm, which includes Slazenger, Donnay and Karrimor, increased sales by 15.5 per cent to £54.3m, with gross profits up 7.7 per cent to £22.3m.

Despite tough comparisons with a year earlier, sports retail sales were 6.9 per cent higher at £529.9m, with gross profit up 12.9 per cent to £230m.

Mr Ashley established the business on leaving school in 1982 and was the sole owner until the group’s stock market listing in March 2007.

He netted £929m in the flotation but as executive deputy chairman he receives no remuneration from the company.