Shares Frasers Group PLC (LSE:FRAS) fell 3% to 738p after the sporting goods retailer reported an underwhelming full-year performance and confirmed that trading remained 'challenging'.
With its results, it failed to provide financial guidance, though the choppy market wasn't the reason; rather, its takeover offers for Hugo Boss and Accent Group were cited. The acquisition of one or both could lead to a variety of outcomes, investors were told.
It recently launched a £1.7 billion bid for Hugo Boss, the German fashion house in which it holds a 26.1% stake, and an on-market offer of £166 million for Australian footwear retailer Accent Group.
The board said it would review the guidance position at the half-year.
Full-year results revealed the Sports Direct and Flannels owner said adjusted profit before tax fell 4% to £538 million in the 52 weeks to 26 April 2026, weighed down by £259.5 million of impairments to tangible and intangible assets and higher net bank interest costs.
Chief executive Michael Murray said the group continued to feel the impact of tough trading conditions, subdued consumer confidence and industry-wide excess inventory through the second half and into the start of the new financial year.
He said these pressures were weighing on the entire sector and creating a prolonged and challenging environment, meaning the full potential of the group's progress had not yet been realised.
Revenue rose 8.7% to £5,325.9 million, driven by international growth of 59.2% following the acquisitions of Holdsport in South Africa and XXL in the Nordics.
Reported profit before tax jumped 38.9% to £527.8 million, largely because fair value losses on equity derivatives linked to strategic investments did not repeat.
Retail profit from trading climbed 22.1% to £912.5 million, helped by underlying growth in UK Sports, provision releases and international acquisitions.
Group gross margin improved by 160 basis points, with Flannels returning to sales growth in what the company called green shoots for the luxury market.
Frasers Plus, the group's credit and loyalty arm, more than doubled its active customers to 1.1 million and accounted for 20.5% of UK online sales, up from 12% a year earlier.
Net debt excluding securitisation rose to £1,168.1 million from £847.5 million, reflecting capital expenditure, acquisitions and strategic investments.
Panmure Liberum reiterated its 'hold' recommendation and 800p price target, saying the numbers were 'slightly below guidance'.
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