SPORTS Direct International appears to be benefiting from the demise of high street rivals as it posted a bumper trading update which sent shares soaring more than 5%.
The company, founded by Newcastle United owner and Rangers investor Mike Ashley, said third-quarter group sales were up 21.1% from £486.8 million to £589.5m in the 13 weeks to January 27 with gross profit up 23.5% to £244.8m.
In spite of some retailers suggesting Christmas was tough, all three of Sports Direct's divisions posted improved revenue and earnings.
Sales at the main sports retail business were 21.2% ahead at £495.8m helped by an improved online platform with gross profit 23.5% up from £165m to £203.7m. That did not include the financial input from the 20 stores Sports Direct bought in January when rival JJB went into administration.
In the premium lifestyle division – which includes fashion retailers Cruise and USC – sales were up 42.4% from £32.8m to £46.7m while gross profit rose 35.1% from £15.1m to £20.4m.
The brands arm has the likes of Slazenger, Dunlop and Karrimor under its umbrella and it recorded a 4.4% rise in revenue from £45m to £47m with gross profit growing 6.7% from £19.4m to £20.7m.
Chief executive Dave Forsey said the firm was sure of hitting a full-year target of £270m of earnings before charges for a bonus share scheme, interest, tax, depreciation and amortisation are taken off.
He added: "The group's strong performance continued during Q3, primarily driven by our Sports Retail division, including online following the successful integration of our new operating platform."
Bhaven Patel, trader at Accendo Markets, said: "The gloomy clouds hovering over the UK high street [are] certainly not hanging above the head of Sports Direct.
"The company will be basking in sunshine after a stellar set of results showing that Christmas really wasn't as bleak as sector peers made out.
"Mike Ashley again demonstrates that he is in tune with the value mantra of the UK consumer offering and has comfortably avoided pitfalls that have claimed high profile names in the past year.
"With online shopping becoming a major catalyst of growth for the UK retail sector, Sports Direct has been ahead of the game in terms of its web offering."
Sports Direct did not offer any update on its joint venture retail business with Rangers although the business is reportedly in pole position to win the naming rights to the Glasgow club's Ibrox stadium.
The continuing strong performance at Sports Direct is good news for Sir Tom Hunter who paid around £1m in August 2012 to net more than 392,000 shares at 255p each.
Shares in Sports Direct closed 5.77% up at 440p.
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