Sports retailers warn of ‘modest’ earnings growth

ROCHDALE-BASED sports retailer Footasylum has warned over a more ‘modest’ growth in earnings amid plans to invest in its stores and online offering.

Shares plunged 39 per cent after the profit alert.

The warning came as Footasylum reported a four per cent rise in underlying pre-tax profits to £8.4m for the year to February 24.

Statutory pre-tax profits fell to £1.9m from £8.1m the previous year.

Clare Nesbitt, chief executive of Footasylum, said: “While our core target market of the 16 to 24-year-old consumer has proved to be comparatively resilient in a downturn, our trading since the beginning of the new financial year has undoubtedly been impacted by the widely-documented weak consumer sentiment on the high street.

“Despite this, we are confident that continued investment in digital and in our stores will allow the company to deliver strong revenue growth for the full year in line with market expectations.

“This includes increased investment in our consumer offering ahead of our usual peak trading period in the second half and delivering additional store upsizes alongside new store openings.

“However, this will have an associated increase in both expected capital expenditure and property costs for the current year and, as a result, we now anticipate that, adjusted EBITDA (underlying earnings) for full-year 2018-19 is likely to show more modest growth than in full-year 2017-18.”