Analysts have praised Sports Direct’s wide-reaching appeal after the sportswear business revealed a “record breaking year”, fuelled by a strong year for British sport.
Group revenue in the year to April 28 rose 20.9% to £2.18bn as underlying EBITDA rose 22.1% to £287.9m and pre-tax profit soared 40% to £207.2m
Ian Mitchell, business unit director at Kantar Worldpanel, said the sportswear business had managed to perform well in a “relatively stagnant market”.
He added: “It has been boosted by shoppers switching their spend from other retailers, especially value outlets and supermarkets, a trend which was worth £15m to the retailer in the past six months. It also continues to benefit from the demise of rival JJB.”
Mitchell said the “real strength” of Sports Direct lay in its broad appeal to consumers of all ages. “It has grown sales from under 25 year-olds by 23% – an impressive performance as, in the overall market, this age group has consistently cut its clothing and footwear spend over the past few months,” he said.
“The retailer is also extremely popular among the over 45s, a group which is still increasing the amount it spends on fashion, with these older shoppers attracted by value for money clothes,” he said.
Independent analyst Nick Bubb predicted that founder Mike Ashley “will be delighted with the performance of the business and the share price”.
Despite Sports Direct warning that tougher comparisons lie ahead, as 2013/14 is a non-tournament year, following the boost from the UEFA European Championships and the London Olympics last year Bubb added: “The internal stretch underlying EBITDA” target of £310m for this year is already looking pretty secure.”