Sports Direct Added to FTSE 100 After Another Impressive Quarter

Sports Direct International plc reported its sales reached £613.3 million ($939 mm) for the 13 week period, up 18.2 percent from the comparable period in 2012, according to an interim management statement. Gross profit increased 23.2 percent to £260.1 million ($398 mm). The figures excluded results from an Austrian retailer it acquired June 26, but included results from a British retailer it acquired in February.

 

Sports Retail sales in the 13-week period increased 14.5 percent to £505.3 million ($774 mm), and Sports Retail gross profit increased 20.3 percent to £215.6 million ($330 mm). Revenue from the Brands division, which owns or licenses such sporting goods brands as Dunlop, Everlast, Karrimor, No Fear and Slazenger, reached £50.9m ($80 mm), up 4.3 percent. Corresponding gross profit increased 7.6 percent to £21.3m ($33 mm).

 

Sports Direct operates approximately 400 stores across the UK and has expanded into 19 countries in Europe. It is currently integrating recent acquisitions, including Republic in the UK, Sports Eybl & Sports Experts in Austria and Sportland in the Baltic region.

 

Sports Direct shares, which traded under the symbol SPD on the London Stock Exchange (LSE), have performed so well this year that the company awarded €100,000 bonuses to 2,000 employees in July. That lead to criticism later, however, when it was learned the company is among many employers in the U.K. using zero-hour contracts to secure part-time workers. In exchange for the guarantee of only a few hours of work a week, the contracts often require part-time employees to ask permission before seeking other work.

 

The controversy did not stop the Financial Times from adding SPD to the FTSE 100 Index hours after it released its earnings Sept. 11. The announcement, which will force many fund managers to buy SPD shares, caused the shares to surge 2.4 percent to €730 last week before closing Friday afternoon at €715, up 85 percent for the year.