Mike Ashley's Frasers Group PLC (LSE:FRAS) shares fell over 2% after the retailer’s full-year sales dropped by 7.4% and adjusted profit before tax rose 2.4% to £560.2 million, near the bottom of its previously guided range.
Revenues fell due to the group's managed decline of Game UK and Studio Retail, more than offsetting growth in Sports Direct, while there was a drop of 14.8% in Premium Lifestyle, which includes the Flannels and Frasers chains, and a 23% drop in financial services.
Gross margin improved by 150 basis points year-on-year, helped by a stronger product and retail mix. Sports Direct UK delivered a trading profit of £475.8 million, up 1.6%, while Premium Lifestyle profit rose 14.7% to £157.4 million.
Frasers recorded £127.2 million in cost savings and synergies, mainly from warehouse automation and acquisitions.
Frasers Plus, the consumer credit and loyalty platform, added 507,000 new customers during the year and now accounts for nearly 19% of UK online sales.
Net debt rose to £847.5 million, reflecting investments in properties and partnerships, including HUGO BOSS and Accent Group.
Post-period, the company secured a new £3 billion credit facility to support its long-term strategy.
For the coming year, the guidance range of £550-600 million was kept the same.
"Following an especially weak period after last year's Budget, both UK consumer confidence and trading conditions improved into 2025, and recent sales trends have been more encouraging," the company said.
Management cited "various macro headwinds" and still expect to incur at least £50 million extra costs from the changes in last year's Budget.
But Frasers added the team is "working hard to mitigate those by taking more costs out, focusing on potential efficiencies through the use of AI, realising further acquisition synergies, and sustaining a robust gross margin".
Chief executive Michael Murray, Ashley's son-in-law, said: "We remain fully committed to our Elevation Strategy, which drove another record year of profitable growth... we have big ambitions to continue to raise the bar."
The shares dropped 2.3% to 630p, up from around 600p at the start of the year but well down on the 900p seen a year ago.