Frasers Group Chief Executive Michael Murray said the Group delivered a solid fiscal first half (H1) ended October 26, driven by Sports Direct and strengthening margins in its Premium & Luxury division, particularly at the Flannels banner. The consumer environment reportedly remains challenging for the company, and while trading has improved compared to last year’s Budget-affected period, it is still weaker than FY24, with excess inventory in the sector continuing to weigh on the wider market.

“Despite this backdrop, our ambitions remain high,” the company wrote in its H1 earnings release. “We are working hard to offset the £50 million-plus incremental annual costs from last year’s Budget through disciplined savings, synergies and efficiencies, and continue to expect FY26 APBT of £550 million to £600 million, including the expected loss from XXL ASA and the first-time equity accounting of Hugo Boss and Accent Group.

“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,” Murray stated. “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.

He said these steps reinforce the Group’s ambition and gives it real confidence in the substantial long-term opportunities ahead for the Group.

FY 2026 First Half Group Summary

Retail revenue increased 5.1 percent year-over-year (y/y) to £2.51 billion.

  • In the UK, sales growth from Sports Direct and Flannels, reflecting the ongoing success of the Elevation Strategy and green shoots in the luxury market, was said to be more than offset by planned declines in Game UK, Studio Retail, House of Fraser, and the businesses acquired from JD Sports.
  • International revenue benefited from the acquisitions of Holdsport (completed in May 2025) and XXL (completed in June 2025), partially offset by the disposal of the MySale business in May 2025.

Group gross margin increased to 47.3 percent of revenue from 45.7 percent in the prior-year H1 period, said to be due to an improved mix effect, as the lower margin percent businesses reduced as a proportion of total revenue, and the higher margin Sports Direct and Flannels businesses continue to grow as a proportion of Group sales. Flannels has reportedly increased its gross margin percent through a more relevant product offering and improved inventory holding.

Group posted Basic EPS of 76.4p, an increase of 40.5p y/y, said to reflect fair value gains on derivatives held in relation to strategic investments. Adjusted EPS amounted to 49.8p, a decrease of 1.2p, or 2.4 percent, in line with the reduction in APBT.

Segment Summary

UK Sports
This segment includes the results of the Group’s core sports retail store operations in the UK, plus all the Group’s sports retail online business, other UK-based sports retail and wholesale operations, Game UK stores and online operations, retail store operations in Northern Ireland, Frasers Fitness, Studio Retail’s sales and the Group’s central operating functions (including the Shirebrook campus).

UK Sports accounted for 51.5 percent of total Group revenue in the first half, compared to 57.2 percent of Group revenue in the prior-year H1 period.

Segment revenue decreased 5.8 percent y/y. Continued sales growth from Sports Direct reflecting the ongoing success of the Elevation Strategy and strengthening brand relationships, was more than offset by planned declines in Game UK and Studio Retail.

Gross profit decreased by £18.6 million in the first half as a result of the sales decline but gross margin percent increased by 140 basis points to 48.3 percent reflecting the fact that the higher margin Sports Direct business now makes up a greater proportion of this segment.

Operating costs reduced by £11.8 million as the benefits of integrating and right-sizing the lower margin businesses were realized, although the savings were largely offset by increases to National Minimum Wage and Employers’ National Insurance. As a result, the segment’s profit from trading declined by £6.8 million year-over-year.

UK Sports’ operating profit result of £168.3 million, compared to £190.0 million in the prior-year H1 period, including impairment charges of £18.0 million in current year H1 and impairment reversals of £5.5 million in the prior-year period, which reflects the write-down of the carrying value of the Matches intellectual property and brands, and realized foreign exchange losses of £8.8 million (FY2025 H1: £4.4 million).

Store numbers increased slightly from 782 doors in H1 last year to 791 doors in H1 this year, mainly driven by the replacement of standalone Game stores with Game concessions situated inside larger Sports Direct stores.

Premium Lifestyle
This segment includes the results of the Group’s Premium and Luxury retail businesses, including Flannels, Cruise, Van Mildert, Jack Wills, House of Fraser & Frasers, Gieves and Hawkes, and Sofa.com along with the related websites, the businesses acquired from JD Sports, as well as the results from the I Saw it First website.

Premium Lifestyle accounted for 17.2 percent of the Group’s H1 revenue this year, compared to 18.8 percent of the Group’s revenue last year.

Segment revenue decreased 3.7 percent y/y as growth in Flannels was reportedly more than offset by the impact of continuing to optimize the store portfolio in House of Fraser, the businesses acquired from JD Sports and Jack Wills, reducing the number of stores from 58 doors at October 27 , 2024 to 34 doors at  October 26, 2025.

Gross profit increased £11.9 million y/y as the negative impact of the revenue decline was more than offset by a 410 basis-point increase in gross margin percent from 38.6 percent of revenue in H1 last year to 42.7 percent in H1 this year. This was said to be the result of an improving mix effect with Flannels increasing its proportion of Group sales and through a more relevant product offering.  This gross profit growth was said to be partially offset by a £6.7 million increase in operating costs, driven by increases to National Minimum Wage and Employers’ National Insurance, resulting in an increase in segment trading profit of £5.2 million.

Premium Lifestyle’s operating profit result of £46.0 million, compared to £48.3 million in H1 last year. This includes impairment reversals of £0.00 this year, compared to impairment reversals of £7.3 million in H1 last year.

Store numbers decreased from 167 doors at H1-end last year to 139 doors at the end of the first half this year as the Group continued to optimize its store portfolio in House of Fraser, the businesses acquired from JD Sports, and Jack Wills.

International Retail
This segment includes the results all of the Group’s sports retail stores, management and operating functions in Europe, Asia and the Rest of the World, including the Group’s European Distribution Centers in Belgium and Austria, Twinsport in the Netherlands, Holdsport in South Africa, XXL in the Nordics, the Baltics & Asia e-commerce offerings, the MySale business in Australia until its disposal in May 2025, and all non-UK based wholesale and licensing activities (relating to brands such as Everlast and Slazenger).

International accounted for 28.5 percent of group revenue in the first half, compared to 21.0 percent of the Group’s revenue in the prior-year H1 period.

International revenue benefited from the acquisitions of Holdsport (completed in May 2025) and XXL (completed in June 2025), partially offset by the disposal of the MySale business in May 2025. This resulted in revenue growth of 42.8 percent year-over-year.

Segment profit from trading increased by £46.4 million y/y.

Gross profit increased by £102.1 million largely due the acquisitions, which also drove an uplift in overhead costs of £55.7 million.

International’s operating profit result of £9.7 million, which compares to £18.3 million in the year-ago H1 period, includes impairment charges of £29.1 million versus impairment reversals of £2.4 million in H1 last year, which reflect the write-down of the goodwill and intangible assets allocated to the Everlast and Twinsport businesses, and realized foreign exchange losses of £2.8 million (FY25 H1: £4.4 million).

Store numbers increased from 372 doors at H1-end last year to 537 doors at the end of the first half this year due to the acquisitions of Holdsport and XXL.

Image courtesy Sports Direct/Frasers Group