Feb and March good months for Sports Direct

Sales at sportswear retailer Sports Direct exceeded management's expectations in February and March.

Dave Forsey, Chief Executive of Sports Direct International said: "This [out-]performance continues to be primarily through the UK division where online sales now represent an even larger proportion of our total retail sales than envisaged at our Interim Results in December 2011."

Group total sales for the nine weeks ending March 25th 2012 were up 13.2% to £267.6m from £236.4m in the corresponding period of last year, and gross profit was up 13.5% to £99.8m from £87.9m the year before.

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Retail division sales for the same period increased 16.1% to £232.6m from £200.4m the year before, and retail gross profit increased 15.1% to £85.4m from £74.2m. This does not include sales and gross profit from the newly formed Premium Lifestyle division. the group advised.

With just six days of the group's financial year left, the group is certain to achieve its so-called "super-stretch" executive bonus scheme target of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of £225m, and has decided to repeat the idea for the next financial year. As such, it will be seeking shareholder approval at the 2012 Annual General Meeting for a Super-Stretch Executive Bonus Share Scheme for Mike Ashley, the company's Executive Deputy Chairman.

Ashley will be granted eight million shares, which will vest in 2018, if two performance criteria are met: the company meets group underlying EBITDA (before the 2011 and Super-Stretch Schemes' costs) targets in each and all of the following three years, as outlined below; the company's net debt/EBITDA ratio is at 1.5x or less in fiscal 2015 (FY15).

Ashley's new targets for group underlying EBITDA (before the 2011 and Super-Stretch Schemes' costs) are: FY13: £270m; FY14: £290m; FY15: £340m.

"We remain positive about the group's outlook and are excited about the summer ahead with the Diamond Jubilee, Euro 2012 and the London Olympics," Forsey said.

JH