Frasers Group has revised its profit expectations for the year as sales fall 8%, due to reduced consumer confidence.
- Pre-tax profits dropped significantly by 33%, affected by currency exchange rates and a decrease in the share price of Hugo Boss.
- Adjusted pre-tax profits also faced a downturn, slipping by 1.5% amidst challenging market conditions.
- Sales were notably impacted across all divisions, with a 20% decrease in financial services revenue and an 8.4% drop in the retail segment.
- Amid the challenging outlook, the property portfolio emerged as a bright spot, marking a 21% sales increase.
Frasers Group has adjusted its profit outlook for the current fiscal year following an 8% decline in total sales. This decline has been primarily attributed to wavering consumer trust and spending habits. The company’s pre-tax profits saw a steep fall, plummeting by 33% to £207.2 million for the 26 weeks ending October 27, from £310.2 million in the previous year. This downturn was compounded by adverse foreign exchange impacts and a significant drop in Hugo Boss’s share price.
Despite this, on an adjusted basis, the company’s pre-tax profit fell modestly by 1.5% to £299.2 million, reflecting the ongoing challenges in the market.
The impact of declining sales was mirrored across its various divisions. Financial services revenues plunged by 20% to £45.7 million, while the retail arm noted an 8.4% reduction to £2.45 billion. Notably, the premium lifestyle segment experienced a fall of 14% to £472.7 million, and UK sports retail sales decreased by 7.6% to £1.37 billion.
Conversely, the property division of Frasers Group bucked the trend, with sales rising by 21% to £38 million, highlighting areas of growth amidst broader revenue challenges.
Looking forward, Frasers Group anticipates ongoing market volatility, with the recent budgetary changes expected to add ‘at least £50 million’ to operational costs in the coming financial year.
Nevertheless, Frasers Group remains committed to its Elevation Strategy, with CEO Michael Murray emphasising efforts to streamline operations and grow internationally. “We are positioning the business for long-term growth, despite the current climate,” he stated, underscoring ambitions to become a global leader in sports retail.
The Frasers Group faces a challenging market landscape but remains resolute in its strategic goals for future growth.
