Frasers Group has lowered its profit outlook for the year to a range of £550m to £600m as group sales fell 8% in the 26 weeks to October 27.
The retail giant reported its pre-tax profit had dropped 33% to £207.2m during the period, down from £310.2m the year before, due to a decrease in foreign exchange and the material decline in the Hugo Boss share price. On an adjusted basis, it slipped 1.5% to £299.2m.
Group sales fell to £2.54bn, dragged down by a 20% drop in financial services revenue to £45.7m and an 8.4% dip in its retail arm to £2.45bn.
Frasers noted a weaker performance across its entire retail division, with premium lifestyle sales down 14% to £472.7m and UK sports retail down 7.6% to £1.37bn.
Its growing property portfolio helped boost sales for the division by 21% to £38.0m.
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The group said it expects to deliver “another year of adjusted pre-tax profit progress in FY25”, however, it cautioned that recent trading conditions have been “tougher” as consumer confidence has weakened.
As a result, it lowered its full year outlook and anticipates reporting an adjusted profit before tax to fall between £550m to £600m, down from a range of £575m to £625m.
The retailer estimated that it expects to incur “at least £50m” of incremental costs going into its next financial year as a result of the recent Budget.
Frasers Group chief executive Michael Murray said: “The first half of this year has been another period of progress for the Group, delivering on our objectives as the Elevation Strategy continues to take the business to the next level.
“Sports Direct UK delivered further sales growth, and our property and financial services divisions are seeing encouraging progress.
“We continue to operate with discipline to ensure our business is as resilient as possible – proactively right-sizing recent acquisitions to set them up for profitable long-term growth and driving further automation benefits to exceed our stock reduction targets for the period.
“We have also made significant strides in international expansion, developing new partnerships across Australia and Africa, and unlocking opportunities as we move further towards our goal of becoming a leading global sports retailer.
“We are set to deliver another year of profitable growth but, given recent weaker consumer confidence leading up to and following the Budget, FY25 APBT is now expected to be in the range of £550m to £600m.”
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