Frasers Group issues profit warning as consumer confidence weakens
Frasers Group, the Shirebrook-based retail giant, is set to take a £50m hit to its bottom line following the recent Budget announcement, it revealed this morning.
The firm, which owns the Sports Direct brand, said that the rise in employers’ national insurance contributions, combined with weaker consumer demand, will see its adjusted profit before tax for its full-year come in lower than expected at around £550m-600m.
Group revenue was down by 8.3% to £2.54bn, for the six months to October 27, while adjusted profits fell by 1.5% to £299.2m
Frasers said it now expected full-year profits to come in at between £550-£600m – a downgrade on previous guidance of £575m-625m.
Michael Murray, chief executive of Frasers Group, 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.”
