Frasers ‘remains cautious’ despite 5% sales rise in H1

Frasers Group has welcomed a “solid” first half of trading, as revenues rose 5% to £2.58bn, driven by an international revenue growth of 42.8%, but said it “remains cautious” amid tough market conditions.

Despite the rise in sales, adjusted pre-tax profits fell by 2.8% to £290.9m following an £82.3m rise in impairments of tangible and intangible fixed assets and an £11.3m rise in interest costs.

These costs were largely offset by a £33.8m gain from the disposal of the group’s Coventry Arena during the period, as well as a £41.1m increase in premiums from strategic investments. 

The group’s retail profit from trading increased 12.2% to £411.4m, with Premium Lifestyle contributing £61.5m after returning to growth in its Flannels chain. 

As part of its ‘Elevation Strategy’, Frasers continued its expansion through completed acquisitions in South Africa and the Nordics, and by opening partner-run stores in Malta, Australia and the Middle East. 

The group said relationships with global brands including Nike, Adidas and Hugo Boss had strengthened, noting that Michael Murray joined the Hugo Boss supervisory board in May 2025. 

In total, associate accounting for holdings in Hugo Boss and Accent Group contributed £19m to first-half profits.

Further UK property investments included shopping centres and retail parks in Greenock and Almondvale, followed by the post-period acquisition of Braehead retail park for £217.6m. The group also opened its largest Sports Direct flagship store in Liverpool and took a stake in US luxury retailer The Webster.

Looking ahead, Frasers noted the consumer environment “remains challenging”, and “although trading has improved compared to last year’s Budget-affected period, it is still weaker than FY24”.

Despite this, it said its “ambitions remain high”, and it is “working hard” to offset the £50m-plus incremental annual costs from last year’s Budget through disciplined savings, synergies and efficiencies.

It anticipates FY26 profits of £550m to £600m, including the expected loss from XXL ASA and the first-time equity accounting of Hugo Boss and Accent Group. 

Michael Murray, CEO of Frasers Group, said: “We’ve made a solid start to FY26 even though market conditions are tough, consumer confidence is very subdued and excess inventory continues to weigh on the industry, leading to increased promotional activity. 

“While we remain cautious into the second half, our focus is unwavering as we confront these challenges head-on, and we are today re-iterating our FY26 APBT guidance of £550m to £600m.” 

He added: “We are continuing to invest boldly in our Elevation Strategy—deepening brand partnerships, elevating our product mix, opening new Sports Direct stores internationally, and acquiring strategic properties to strengthen our portfolio. These steps reinforce our ambition and give us real confidence in the substantial long-term opportunities ahead for the group.”