British retail, sport and intellectual property group Frasers has reported five per cent revenue growth to £2.58 billion (~$3.44 billion), fuelled by a strong 42.8 per cent rise in international sales in the first half (H1) of fiscal 2026 (the 26 weeks ended October 26, 2025).
Group and retail gross margins improved by 160 basis points, reflecting a sharper product mix and rising contributions from Sports Direct and Flannels.
Adjusted profit before tax (APBT) slipped 2.8 per cent to £290.9 million as higher impairments (£82.3 million) and increased interest costs (£11.3 million) offset gains from the £50 million disposal of Coventry Arena and higher earnings from strategic investments.
Retail profit from trading rose 12.2 per cent to £411.4 million. Luxury showed signs of recovery, with Flannels returning to sales growth and Premium Lifestyle delivering a 9.2 per cent trading profit increase to £61.5 million.
The group accelerated its Elevation Strategy, completing acquisitions of Holdsport in South Africa and XXL in the Nordics, and opening new partner-led stores in Malta, Australia and the Middle East, Frasers Group said in a financial release.
Stronger ties with Nike, Adidas and Hugo Boss continued, with Michael Murray appointed to the Hugo Boss supervisory board. Associate accounting for stakes in Hugo Boss and Accent Group added £19 million to APBT.
Property investments remained a priority, with new sites in Greenock and Almondvale and the post-period £217.6 million acquisition of Braehead retail park. The company also expanded its US luxury footprint through an investment in The Webster and opened its largest Sports Direct flagship in Liverpool.
Synergy and automation savings reached £10.3 million despite higher payroll costs following the UK National Minimum Wage and National Insurance increases.
"We've made a solid start to FY26 even though market conditions are tough, consumer confidence is very subdued, and excess inventory continues to weigh on the industry, leading to increased promotional activity,” said Michael Murray, chief executive of Frasers Group.
Frasers Plus continued to scale, ending the period with 1.1 million active customers versus 0.4 million a year earlier. Credit-based retail sales were stable at £154 million, with the platform contributing 20 per cent of UK online sales.
The balance sheet strengthened further, with net assets rising to £2.39 billion from £1.99 billion at FY25, supported by improved margins in the Premium & Luxury division and solid performance at Sports Direct.
The group noted a still-challenging consumer environment and persistent excess inventory across the sector but reiterated its FY26 APBT outlook of £550 million to £600 million, including expected losses from XXL ASA and first-time equity accounting for Hugo Boss and Accent Group.
“While we remain cautious into the second half, our focus is unwavering as we confront these challenges head-on, and we are today re-iterating our FY26 APBT guidance of £550 million to £600 million. We are continuing to invest boldly in our Elevation Strategy-deepening brand partnerships, elevating our product mix, opening new Sports Direct stores internationally, and acquiring strategic properties to strengthen our portfolio. These steps reinforce our ambition and give us real confidence in the substantial long-term opportunities ahead for the Group," Murray continued.
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