The British retail group Frasers Group Plc ended the first half of the 2024/25 financial year with losses in sales and earnings. The company also lowered its profit forecast for the current year on Thursday.
In the 26 weeks before October 27th, group sales were 2.54 billion British pounds (3.07 billion euros). This means that it fell by 8.3 percent compared to the same period last year.
Despite growth at the Sports Direct retail chain, revenue in the UK Sports Retail segment fell by 7.6 percent to 1.37 billion British pounds. In the Premium Lifestyle division, which includes the fashion retailers Frasers and Flannels, there was a decline of 14.1 percent to 472.7 million British pounds. In international business, sales fell by 5.3 percent to 611.4 million British pounds.
The half-year profit shrinks by a third
Despite a higher gross margin and lower operating costs, operating profit fell by 10.5 percent to 266.8 million British pounds, not least due to negative currency effects.
Earnings before taxes adjusted for special effects fell by 1.5 percent to 299.2 million British pounds, and the reported net profit attributable to shareholders shrank by 33.7 percent to 155.3 million British pounds (187.4 million euros).
Due to higher taxes: The group is lowering its earnings forecast
The group stated that it had made further progress in implementing its strategy in the first half of the year. The company “remains confident in its ability to develop and implement plans that ensure long-term, sustainable and profitable growth,” it said in a statement. Nevertheless, the earnings forecast for the current financial year has been revised downwards. A pre-tax profit adjusted for special effects is now expected to be in the range of 550 to 600 million British pounds, after previously targeting 575 to 625 million British pounds.
The retailer attributed the bleaker outlook to the impact of tax increases announced by the new British Labor government in its budget at the end of October. Since then, customer confidence has fallen and trading conditions have deteriorated, the company said. As a result of the expected additional costs, additional costs of around £50 million are to be expected in the coming financial year.