Sales at Sports Direct (SPD.L), Britain's biggest sporting goods retailer, were up 9 percent in its latest quarter, with the soccer World Cup providing a stimulus to trade despite England's woeful performance in the tournament.

Sportsdirect.com

The firm, in which Newcastle United soccer club owner Mike Ashley has a 71 percent stake, said sales rose to 408 million pounds ($626.6 million) in the 13 weeks to July 25, its fiscal first-quarter, up from 375 million pounds in the same period last year.

Gross profit increased 17.8 percent to 185 million pounds.

"Despite the performance of the England team during the World Cup, these results clearly show that Sports Direct had a good World Cup," the retailer said.

England, third-favourites to win the competition, were thrashed by Germany in the first knock-out stage.

Sports Direct, which owns Sports World and Lillywhites stores as well as brands including Slazenger, Lonsdale and Dunlop, said that since the end of July its performance had remained strong and in line with management expectations.

The firm said it was maintaining its target of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of around 195 million pounds for the year to end-April 2011, up from 160.4 million pounds made in 2009-10.

Shares in Sports Direct, which floated at 300 pence in 2007, have increased by 27 percent over the last year, outperforming the UK general retailers' index .FTASX5370 by 25 percent.

The stock was up 0.3 percent at 114.1 pence at 0852 GMT, valuing the business at about 657 million pounds.

"There has been a stronger than expected gross margin performance, in spite of there being some clearance activity on World Cup product, which is ongoing, following the early exit by England," said Matthew McEachran, analyst at Singer Capital Markets.

Sports Direct fared better than most UK retailers during the recession thanks to its discount pricing and the weakness of its main rival JJB Sports (JJB.L), which came close to going into administration in 2009.

An industry survey on Tuesday showed British retail sales growth accelerated last month, helped by clothes sales, but discounting played a part in the improvement and consumers remain reluctant to splash out on expensive items.

Many experts think British retailers face a tough winter as the government cuts spending and raises taxes to rein in a record public deficit.

Last September probes were launched by the Office of Fair Trading (OFT) and the Serious Fraud Office (SFO) into allegations of anti-competitive activities and fraud in the UK sports retail market.

($1=.6511 pounds) (Editing by Greg Mahlich)