Sports Direct International Plc Posts 10% Sales Growth

Shares in Sports Direct (LSE: SPD) dropped 2% to 815p this morning after a trading update received a lukewarm response from the market.

Sports DirectSports Direct, which has around 400 stores in the UK, saw sales increase 10.3% to £360m in the nine weeks to 30 March. Gross profit increased 11.5% to £147m.

The board is “very confident” that the firm will meet its £310m earnings goal, which nonetheless failed to cheer investors.

The chief executive, Dave Forsey, commented:

“Sports Retail continues to perform well since the end of January, primarily driven by our on-going focus on exceptional quality, unbeatable value, availability and the continued optimisation of sales between stores and online.”

Earlier this month shareholders rejected a bonus package for Mike Ashley — who has a 62% stake in the company — of which the board noted their disappointment. Mr Ashley, who founded the company in Maidenhead in 1982, receives no salary from Sports Direct.

Sports Direct will reveal its preliminary results on 17 July. Analysts predict that earnings per share will increase by a fifth to 30p. Shares in Sports Direct may therefore trade on a forward P/E of 27 while there is no dividend offered.

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Mark does not own shares in Sports Direct.