Sports Direct posts 28% increase in full-year profits.
In 2006 Sports Direct (LSE: SPD) overtook JJB Sports (LSE: JJB) as the UK's biggest sportswear retailer. It has not looked back since. What's more, today's results reveal just how far Sports Direct has progressed and how much JJB has retreated since then.
This morning, shares in Sports Direct held firm at 294p after it posted a 28% increase in full-year profits to £153m. This was thanks to an impressive 13% rise in revenues to £1.8bn. The company reported growth across all divisions with online sales a standout success. Sales on the internet, which accounts for almost an eighth of Sports Retail sales, grew 82%.
As a result of the strong result and the outperformance of internally set targets, Sports Direct said 2,000 eligible staff would benefit from the company's first share award next month.
The news could not be more different at JJB Sports, which saw its shares plunge 29% to 5.3p. The company said it has experienced deterioration in trading performance since the beginning of April, owing principally to poor sales of football replica kits. Like-for-like sales in the 24 weeks ended to 15 July decreased by 8.7%. Cash margin dropped 16.6% and net bank debt was £17.7m.
Worryingly, JJB Sports said it has put its store refurbishment plan on hold even though the strategy was showing encouraging results. Revamped stores had seen an increase in both sales and margins. It is also in talks with its strategic partners to "accelerate the timing" of additional funding, which is required for its turnaround strategy.
If you are looking to find the Sports Direct while avoiding potential JJB Sports, we've published "Top Sectors Of 2012" -- our guide to three favourable industries. This free report will be dispatched immediately to your inbox.
More free Motley Fool reports:
> David does not own any of the shares mentioned.
