The British retail group Frasers Group Plc has closed the first half of the 2024/25 financial year with losses in sales and earnings. The company also lowered its profit forecast for the current year on Thursday.

In the 26 weeks up to October 27, group sales amounted to 2.54 billion British pounds (3.07 billion euros), a decrease of 8.3 percent compared to the same period last year.

Despite growth at the Sports Direct retail chain, revenues in the UK Sports Retail segment fell by 7.6 percent to 1.37 billion British pounds. In the Premium Lifestyle division, which includes the fashion retailers Frasers and Flannels, there was a decline of 14.1 percent to 472.7 million British pounds. In international business, sales shrank by 5.3 percent to 611.4 million British pounds.

Half-year profit shrinks by a third

Despite a higher gross margin and lower operating costs, operating profit decreased by 10.5 percent to 266.8 million British pounds, not least due to negative currency effects.

Earnings before taxes adjusted for special items fell by 1.5 percent to 299.2 million British pounds, while reported net profit attributable to shareholders shrank by 33.7 percent to 155.3 million British pounds (187.4 million euros).

Due to higher taxes: The group lowers its earnings forecast

The group said it had made further progress in implementing its strategy in the first half of the year. The company remains "confident in developing and implementing plans that will ensure long-term, sustainable and profitable growth," it said in a statement. Nevertheless, the earnings forecast for the current financial year has been revised downwards. Pre-tax profits adjusted for special items are now expected to be in the range of 550 to 600 million British pounds, after previously targeting 575 to 625 million British pounds.

The retailer attributed the gloomy outlook to the impact of the tax increases that the new British Labour government announced in its budget at the end of October. Since then, customer confidence has fallen and trading conditions have worsened, the group said. As a result of the expected additional costs, additional charges of around 50 million pounds are also expected in the coming financial year.

This article originally appeared on FashionUnited.DE, translated and edited to English.

It was translated using an AI tool.