LONDON -- Sports Direct (LSE: SPD.L) this morning released its pre-close trading update for the first half of its financial year and is still riding its own Olympics wave of high-street euphoria.
Gross profit rose 21.7% from H1 2011 to 167.4 million pounds. Total sales for Q2 increased by 18% to 402.7 million pounds, above the prior-year quarter's 341.3 million pounds and marginally down from Q1's 25% comparative rise in sales.
The year-on-year breakdown saw sports retail sales increase 16.8% to 344.7 million pounds, the brands division revenue increase 18.9% to 39.7 million pounds, and "premium lifestyle" sales increase 43% to 18.3 million pounds. The half-year's gross profit figures saw Sports Retail up 20.5% from the prior-year quarter to 142.8 million pounds, brands up 33.9% to 17 million pounds, and premium lifestyle up 18.8% to 7.6 million pounds.
Chief executive Dave Forsey commented: "The Group has continued to deliver strong growth through the second quarter, especially within the U.K. Sports Retail division where sales and margins benefited from the London Olympics and an excellent 'back to school' period. Since the end of September trading has remained equally strong and the Board is therefore confident of reaching the full year targeted "super stretch" underlying EBITDA of 270 million pounds (before the charge for the bonus share schemes)."
The positive update comes at the end of a month in which the company bought 20 shops from the administrators of JJB Sports. On Dec. 13, Sports Direct will announce its interim results for the 26 weeks ending Oct. 28.
The share price was largely unmoved by the news this morning, falling 1% to 399.8 pence at the time of writing from yesterday's close of 404 pence.
It's hard to believe that in 2008, Sports Direct's shares traded at a low of 32 pence. However, strong management and a firm strategy have seen them not only survive, but thrive in the recession, making them a 12-bagger from 2008's low price.
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