Holdsport posts rise in earnings
HOLDSPORT, whose retail chains include Sportsmans Warehouse, on Friday reported a 3.8% rise in core headline earnings per share to 163.1c for the six months ended August.
HOLDSPORT, owner of the retail chains Sportsmans Warehouse and Outdoor Warehouse, on Friday reported a 3.8% rise in core headline earnings per share to 163.1c for the six months ended August, amid “a tough trading environment”.
JSE-listed Holdsport reported 5% sales growth during the period, to R630.9m. The group’s shares fell 6.98% to an intraday low of R46.51 on Friday (before recovering to close at R49.99).
Holdsport chief financial officer Cobus Loubser said the group was “very happy with the growth in operating profit” from Sportsmans Ware- house, which accounts for about 73% of Holdsport’s sales.
Sportsmans Warehouse sales grew 5.9% to R458.1m, while sales from Outdoor Warehouse were up 1.8% to R141.9m.
Mr Loubser said Outdoor Warehouse “is trapped in a market segment that’s not really growing at the moment — where there (are) very (few) new products and new trends stimulating demand, and where customers are under pressure”.
While the outdoor retail market was also a competitive one, Outdoor Warehouse remained “a good business and still generates good profits for us, and it has a good position in its market segment”.
Meanwhile, Holdsport’s Perfor- mance Brands wholesale business, which includes the First Ascent and Capestorm brands, achieved good growth, with external sales rising 6.1% to R30.9m. Performance Brands sells about half of its product to the group’s retail chains and the other half externally.
Group operating profit rose 3.5% to R94.1m, and the group declared an interim gross dividend of 75c per share, up from 70c previously.
Mr Loubser said Holdsport had not benefited from major sports events during the period, as it had in previous years. While the group relied on discretionary spending, consumer confidence indices were low and Holdsport was “seeing evidence of that”.
However, he said “we are happy with where we are strategically — but we are trapped with a consumer who is just not feeling confident to spend on these kinds of products at the moment”.
Holdsport successfully completed and moved into its new retail distribution centre during the period. Meanwhile, Performance Brands started construction of an additional warehouse, which would be complet- ed at the end of the calendar year.
Mr Loubser said the distribution centre “was a significant investment for us” from a strategic perspective. The group signed lease agreements for two more stores to be opened in the next financial year. Sportsmans Warehouse has 35 stores, while Outdoor Warehouse has 19.
Mr Loubser said Holdsport was “naturally a little bit concerned about the consumer at the moment — we don’t expect things to improve dramatically in that environment for the next few months”. However, he said much of Holdsport’s full-year performance was determined by sales over the festive season, when demand spiked.