Mike Ashley’s Frasers lowers profit guidance following Budget
Mike Ashley’s Frasers Group has lowered its outlook for the financial year citing tougher trading conditions in the wake of October’s Budget.
The retailer expects to deliver adjusted pretax profit in the range of £550m to £600m for the 2025 financial year, down from £575m to 625m previously.
“Both ahead of and after the recent Budget, consumer confidence has weakened and recent trading conditions have been tougher,” the firm said in its half year results.
Looking into 2026, Frasers expects to incur costs of at least £50m after the Chancellor hiked employers’ national insurance and increased the minimum wage in the Budget. It said it was “working hard to mitigate” the extra costs.
In early trade shares were down over 13 per cent.
The guidance came after the firm reported that pretax profit fell by a third in the six months to the end of October, dropping to £207m.
Frasers said its trading performance had been “offset by a decrease in foreign exchange gains” and movements in equity derivatives. On an adjusted basis, pretax profit fell dipped by 1.5 per cent to £299m, down from £304m last year.
Although Frasers reported continued sales growth from Sports Direct, this was more than offset by “planned declines” at Game UK, Studio Retail and Sportmaster in Denmark.
Frasers is in the process of “right-sizing” those firms, which were previously unprofitable, to put them on a more sustainable footing. It also pointed to a “challenging luxury market” as a drag on sales.
“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,” Michael Murray, chief executive of Frasers, said.
“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.”