Profits down at Decathlon Ireland despite Covid recovery

The Irish arm of the French-owned sports retailer Decathlon reported a dip in profits for last year despite a rebound in sales as normal trading patterns resumed in the wake of the Covid-19 pandemic.

Turnover at Decathlon Sports Ireland – the trading entity behind the brand’s Ballymun, Dublin 11 megastore, which also acts as Decathlon’s main European supply centre – climbed more than 13 per cent to nearly €7.5 billion in the 2022 calendar year, according to recently filed accounts.

The retailer’s Irish turnover was essentially flat year on year at €38.5 million but has increased by more than 50 per cent from 2020 when the store was forced to close due to the pandemic.

Despite the uptick in sales, after-tax profits slumped to €17.9 million from €65.7 million in 2021, largely due to a sizeable foreign exchange loss of €16.8 million.

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[ Decathlon Ireland’s Elena Pecos: ‘This environment is our playground. We need it’ ]

In a note attached to the accounts, the company said it is exposed to transactional foreign currency risk on trading activities conducted in currencies other than the euro, particularly related to purchases and sales in the US dollar. European companies were impacted by the depreciation of the euro against the dollar in 2022, with the euro-to-dollar exchange rate recording its lowest value since 2008 in August of last year.

Decathlon said it had entered into foreign currency forward contracts to “mitigate” the risks associated with fluctuations and was committed to the purchase of $4.4 billion (€4.1 billion) in exchange for euros.

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Overall, the directors noted in the accounts that supply activities had “recovered well from the effects of the pandemic in 2020 and 2021″. The Irish entity traded in line with the group’s objectives “despite the foreign exchange loss incurred during the year”.

Subsequent to the reporting period, Decathlon opened its second Irish store at Parkway Retail Park in Limerick in May this year.

Speaking to The Irish Times in July, Elena Pecos, chief executive of Decathlon Ireland, said: “Both the stores, they are working well. The Irish people trust in our brand.”

Ms Pecos said the group will continue to invest in its both its physical and online footprint over the coming years, opening new stores in “big cities”. Before the pandemic, Decathlon had said it was targeting nine physical stores in Ireland, including additional sites in Dublin.