Frasers Group (FRAS) H1 2026 earnings summary

Executive summary

• Group revenue rose 5.0% year-over-year to £2,581.3m, driven by 42.8% international growth and margin improvements in Sports Direct and Premium & Luxury, especially at Flannels, despite a challenging consumer environment and sector-wide excess inventory.

• Adjusted profit before tax (APBT) fell 2.8% to £290.9m, mainly due to higher impairments and interest costs, partially offset by gains from disposals and strategic investments.

• Gross margin improved by 160 bps to 47.3%, with notable gains in UK Sports and Premium Lifestyle segments.

• Basic EPS increased to 76.4p, up 40.5p year-over-year, reflecting fair value gains on derivatives; adjusted EPS was 49.8p, down 2.4%.

• Continued execution of the Elevation Strategy, including international expansion, brand partnerships, and property acquisitions.

Financial highlights

• Group revenue rose 5.0% year-over-year to £2,581.3m; retail revenue up 5.1% to £2,509.1m.

• Group gross margin increased by 160 bps to 47.3%; retail gross margin also up 160 bps to 46.2%.

• Adjusted profit before tax (APBT) fell 2.8% to £290.9m; adjusted basic EPS down 2.4% to 49.8p.

• Net assets increased to £2,394.2m from £1,988.1m at FY25; net assets per share up to £5.32.

• Cash inflow from operating activities before working capital was £430.8m, supporting ongoing investments.

Outlook and guidance

• FY26 APBT expected between £550m and £600m, including losses from XXL ASA and first-time equity accounting of HUGO BOSS and Accent Group.

• Ambitions remain high despite a weaker trading environment compared to FY24.

• Focus remains on cost savings, synergies, and efficiency to offset over £50m in incremental annual costs.