Frasers warns of £50m budget hit despite FY25 profit rise

Frasers has seen pre-tax profits rise by 2.8% to £560.2m in its full-year results, but has warned it faces over £50m in extra costs caused by last year’s budget.

In the year ended 27 April 2025, trading was particularly strong in the second half, where  profits were up by 8.3%, but overall full-year sales fell by 7.4% to £4.92bn. 

This was in part offset by £127.2m of underlying cost-savings and synergy benefits over the period, largely from investments in warehouse automation and acquisitions. 

The group also welcomed another period of sales growth in Sports Direct UK, where profit from trading rose by £7.4m, or 1.6%, to £475.8m. 

The group’s Premium Lifestyle profits also rose by 14.7% to £157.4m, driven by integration and other cost benefits offsetting ongoing challenges in the luxury market.

Over the period the group also furthered international expansion with new partnerships in Australia, Asia and EMEA, and said its relationships with global brands, including Nike and adidas, are the “strongest they have ever been”.

Following an “especially weak” period after last year’s budget, Frasers noted both UK consumer confidence and trading conditions improved into 2025, and recent sales trends have been “more encouraging”. 

Despite this, it said it was still “mindful” of macro headwinds for FY26, and expects to deal with at least £50m of incremental costs as a result of last year’s budget. It said it is “working hard” to mitigate and reduce these costs through the use of AI, further acquisition synergies, and sustaining a “robust” gross margin. 

It currently expects profit-before-tax in the range £550m-£600m for the next financial year. 

Michael Murray, CEO of Frasers Group, 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 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.” 

He added: “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, and we are currently expecting FY26 APBT in the range £550m-600m. Looking further forward, we remain confident in our strategy and our plans to deliver multi-year, sustainable profitable growth.”