Frasers Group, which operates retail brands including Sports Direct, Flannels, Frasers, USC, Evans Cycles and GAME, delivered strong revenue growth and improved retail profitability for the financial year ending 26 April 2026, although underlying profit was slightly lower due to higher impairments and financing costs.
Revenue increased 8.7% to £5.3bn, driven primarily by international growth of 59.2%, highlighting the group’s continued expansion outside the UK.
Despite this, Adjusted Profit Before Tax (APBT) fell 4.0% to £538.0m. The decline was mainly caused by higher impairment charges, increased interest costs and investment write-downs. These headwinds were partly offset by gains from strategic investments, profit growth from associates, provision releases, and the £33.8m gain from the sale of Coventry Arena.
In contrast, reported Profit Before Tax rose sharply by 38.9% to £527.8m, largely because the prior year included fair value losses on equity derivatives that did not recur.
Operational performance
Operationally, performance was strong, with Group gross margin improved by 160 basis points, and retail margin up 150bps. Both UK Sports and Premium Lifestyle improved gross margins by 290bps, benefiting from better product availability and sales mix. UK Sports profit from trading increased 17.6% to £559.4m, while retail profit from trading rose 22.1% to £912.5m, supported by UK Sports growth, international acquisitions and provision releases.
The business also spoke of encouraging “green shoots” in luxury retail, with Flannels returning to sales growth and the Premium Lifestyle division delivering improved profitability through a stronger product offering and better inventory management.
Strategically, Frasers Group continued to focus on its core operations, disposing of the non-core Coventry Arena business for £50m, generating a £33.8m disposal gain.
Impact of the Elevation Strategy
Michael Murray, chief executive of Frasers Group, attributed the results to the success of the company’s Elevation Strategy – its multi-pillar business plan designed to transition the company from a traditional discount retailer into an upmarket, world-class retail ecosystem. He described this as going “from strength-to-strength, with positive momentum from brand partners and strong feedback from consumers validating our strategy and giving us the confidence to continue to execute with ambition and conviction.”
However, he highlighted the impact of the current economic environment on business. “We continued to feel the impact of tough trading conditions, subdued consumer confidence and industry-wide excess inventory levels through Half 2 and into the start of FY27,” he said. “These pressures are weighing on the entire sector, creating a prolonged and challenging environment, meaning the full potential of this progress has not yet been realised. Despite these external factors, the Group remains focused, resilient and will continue to invest in opportunities that support sustainable profitable growth.”
While a tougher trading backdrop and higher impairment costs weighed on adjusted earnings, Frasers Group’s improving margins, international expansion and renewed momentum at Flannels suggest the retailer’s focus on premiumisation and profitable growth remains firmly on track.
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