Retail group Sports Direct International expects to report a jump in profits on Thursday, but has been cautious about its outlook.
Sports Direct – controlled by Mike Ashley, the owner of Newcastle FC – saw the boost from the World Cup in the first quarter continue into the second as group sales lifted 5.4% to £295 million in the nine weeks to September 26.
But the owner of Sports World stores and brands including Slazenger and Donnay has warned that it expects the early months of 2011 to be “extremely challenging”. The company is expected to hold on to some of its higher-than-expected earnings despite the uncertain trading outlook.
Katharine Wynne, analyst at Investec Securities, said: “The company is rightly very cautious about the fourth quarter, when the combination of VAT increases, new season price increases and lack of sports spending catalysts may all offset the benefit of soft comparisons.”
The City will be looking for any signs that the company plans to capitalise on the poor performance at rival JJB Sports. JJB recently warned it was likely to breach the terms of a £25 million loan as trade at the embattled company continued to deteriorate.
Meanwhile, SuperDry fashion firm SuperGroup is expected to continue its stellar performance on Wednesday when it announces half-year results.
Shares in the firm, which claims to be one of the fastest growing fashion retailers, have nearly trebled in value since it went public in March on the back of strong trading updates.
Sales at SuperGroup increased by 65.4% to £90.3 million in the six months to October 31.
In its most recent quarter it opened a record 14 franchise stores overseas, including its first in the United Arab Emirates, bringing its total to 49. It also opened eight stores in the UK, bringing its total to 59 and opened a further 13 concessions in House of Fraser bringing the total up to 69.
Investors are hoping the group can carry on last year’s strong performance when it increased pre-tax profits by 196% to £22.5 million in the year to May 2.
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