NEWCASTLE United owner Mike Ashley’s Sports Direct International sportswear empire offered some rare retail cheer yesterday after betterthan- expected results.

The group, which owns the Sports World chain, exceeded City hopes and bettered its previous performances this year with underlying earnings up more than seven per cent to £89.9m in the 26 weeks to October 26.

The business has been hit by the failure of home nations to qualify for the Euro 2008 football championships and lower consumer spending.

But Sports Direct maintained its guidance of £135m in full-year earnings as the firm squeezes efficiencies from the business and draws in customers with its cheaper offering.

UK retail revenues fell 1.6 per cent to £510.1m, but Sports Direct – which also owns brands including Slazenger, Dunlop and Lonsdale – described the performance as robust.

Chief executive David Forsey said he expected the bleak high street environment to last well into next year, but that trading since the end of October had been in line with expectations.

Sports Direct’s focus on efficiencies, tight cost control and maintaining prudent stock levels had helped it absorb higher costs such as energy, fuel and commercial rents, he added.

The group has 366 stores in the UK and is planning a further 20 next year despite the tough retail climate.

Sports Direct also has 63 overseas outlets and said it was considering its next steps in the lucrative Chinese market after signing a deal with retailer ITAT to sell its Dunlop and Lonsdale wares in February.

Billionaire Mr Ashley – who is still searching for a buyer for Newcastle United – netted £929m in a single day by floating part of the business early last year, but shares now stand almost 90 per cent below the original offer price.