Frasers Group profits rise but Budget costs pose challenge

Frasers Group, whose business include department stores, Sports Direct and Flannels, reported adjusted pre-tax profit up 2.8% to £560.2m last year, when retail revenue slid 7.4% to £4.75bn. Reported pre-tax profit fell 24.3% to £379.4m.

The retailer said it expects adjusted pre-tax profit in the current year to be between £550m and £600m as it seeks to address “various macro headwinds and…to incur at least £50m of incremental costs as a result of last year’s Budget”.

Frasers said that “following an especially weak period after last year’s Budget, both UK consumer confidence and trading conditions improved into 2025, and recent sales trends have been more encouraging”. The retailer reported: “Longer term, we remain excited by the potential across the Group, especially for Sports Direct after our significant recent step up in international expansion, and for [credit business] Frasers Plus, and expect these to contribute to our ambitious plans for developing and delivering multi-year, sustainable profitable growth.”

Chief executive Michael Murray said: “I’m pleased with our performance this year, despite the headwinds caused by last year’s Budget. We remain fully committed to our Elevation Strategy, which drove another record year of profitable growth and further delivery of our key priorities.

“We continued our strategy of confidently investing for the future, unlocking multiple opportunities for sustainable medium- to long-term growth. We accelerated our international expansion, announcing partnerships in Australia, Asia and EMEA, to further build Sports Direct into a truly worldwide proposition.

“Our relationships with the world’s best global brands, including Nike, Adidas and Hugo Boss are the strongest they have ever been, and our ambitious growth plans are now strengthening and scaling these partnerships even further.

“We captured over £125m of synergies through strategic acquisition integrations and cost-savings, and continued to invest in real estate opportunities that deliver great value for the group. Frasers Plus is going from strength-to-strength and is on track to meet its long-term ambitions. Delivering on all of these priorities demonstrates disciplined execution business-wide, but there is still more important work to be done.

“For FY26 so far, we are seeing positive momentum across the group, including strong performance at Sports Direct – and we have big ambitions to continue to raise the bar. We are working hard to mitigate the £50m-plus of extra costs caused by last year’s Budget. We remain confident in our strategy and our plans to deliver multi-year, sustainable profitable growth.”