Frasers Group, the U.K.-based parent of Sports Direct, reported sales grew 23.6 percent in the 26 weeks through October 24, to £2,339.8 million.
The gain was largely due to the reopening of stores after lockdowns, continuing positive online performance and the comparative period being impacted by lockdowns as a result of the pandemic.
Gross margin for the Group increased 70 basis points to 44.7 percent (FY21 H1: 44.0 percent) as it maintained product margins over the period.
Adjusted PBT (profit before tax) was up 61.7 percent, largely driven by the reopening of stores after lockdown, new Flannels stores, the FY21 comparative including the impact of the pandemic-related lockdowns, and continued operating efficiencies. Excluding acquisitions and on a currency-neutral basis, adjusted PBT is up 88.4 percent with the difference to the 61.7 percent growth figure largely because of impairments.
In the first half, impairments of £135.3 million (FY21 H1: £128.9 million) were recognized due to the ongoing impact of the pandemic, further restrictions including lockdowns returning to parts of Europe, the availability and cost of shipping containers and other supply chain cost increases, and the likely cost of a living squeeze on consumers, all being factored into our future forecasting.
Adjusted basic earnings per share in the half increased by 66.9 percent to 29.2p (FY21 H1: 17.5p). Reported profit before tax increased by 75.3 percent to £186.0 million (FY21 H1: £106.1 million).
Among its segments, UK Sports Retail revenue increased 27.6 percent to £1,367.1 million. Excluding acquisitions, revenue grew 27.0 percent largely due to the reopening of stores after the last lockdown in March 2021 and the prior period comparative including COVID-19-related lockdowns.
UK Sports Retail includes all of the Group’s sports retail and USC store operations in the UK, including Northern Ireland, all of the Group’s sports online businesses, excluding Bob’s Stores, Eastern Mountain Sports, Baltics, and Malaysia, the Group’s gyms, Evans Cycles, GAME UK stores and online operations, and the Group’s Shirebrook campus operations. UK Sports Retail is the main driver of the Group and accounts for 58 percent of the Group’s revenue.
In the Premium Lifestyle segment, revenue grew 33.6 percent to £427.9 million largely due to new Flannels stores, continued growth in online, growth in House of Fraser, and the impact of COVID-19-related lockdowns on the prior period comparative. The Premium Lifestyle segment consists of Flannels, Cruise, van mildert, House of Fraser, Jack Wills, and Sofa.com fascia stores and corresponding web sales.
In the European Retail division, revenue increased 13.6 percent to £399.8 million. On a currency-neutral basis and excluding acquisitions, European Retail revenue increased by 18.4 percent largely due to temporary store closures as a result of COVID-19 in the prior period comparative. The European Retail division includes the Group’s sports retail store management and operations in Europe, including the Group’s European distribution centers in Belgium and Austria, stores and corresponding web business in the Baltic regions and GAME Spain stores and corresponding web business.
In the Rest of World Retail segment, revenue decreased 14.9 percent to £65.6 million mostly due to COVID-19-related restrictions in Malaysia. Gross margin increased to 53.0 percent from 39.6 percent largely due to inventory holding efficiencies combined with less year-on-year promotional activity in its U.S. businesses. Adjusted PBT was £14.3 million, compared to £7.7 million in FY21 H1, largely due to overall operating efficiencies in its U.S. businesses.
Rest of World Retail includes sports stores in Malaysia trading under the Sports Direct fascia, retail stores in the U.S. trading under Bob’s Stores and Eastern Mountain Sports and its online businesses. In Malaysia, the stores are 51.0 percent owned by the Frasers Group.
Logo courtesy Frasers Group
