Frasers Group Shares Rally as it Forecasts ‘Multi-Year Profitable Growth’

Frasers Group (LON: FRAS), the retail giant behind Sports Direct and House of Fraser, reported a strong year with a focus on future growth, pushing their shares more than 7% higher at the start of Thursday's session.

Their adjusted profit before tax rose 13.1% to £544.8 million, coming in at the top end of the company's guidance range of £500 million to £550 million.

Frasers Group attributes its success to its Elevation Strategy, which prioritizes profitable growth, strong brand partnerships, operational efficiency, and the launch of its new financial services offering, Frasers Plus.

Michael Murray, Chief Executive of Frasers Group, stated it has been a pivotal year for building the company's future growth.

“As well as delivering a strong trading performance, particularly from Sports Direct, we made significant progress with our Elevation Strategy,” he stated. “We expanded our retail ecosystem, establishing valuable partnerships with new brands. Our brand relationships have never been stronger, giving us invaluable support as we continue the international expansion of our business.”

Frasers highlights several key successes. Their adjusted earnings per share increased by a significant 33.6%. They expect continued strong performance with an anticipated profit before tax (adjusted) in the range of £575 million to £625 million for the next financial year.

The Elevation Strategy focuses on strengthening brand partnerships, such as those recently established with The North Face, On, and Columbia.

The company reports a strong trading performance, particularly from Sports Direct, due in part to these new partnerships.

Frasers also made significant investments in warehouse automation and digital infrastructure to improve operational efficiency. They aim to see a positive impact as early as the next financial year.

The launch of their new financial services offering, Frasers Plus, is said to have shown early promise.

The FTSE 100 company sees this as a key pillar of its brand ecosystem, with long-term ambitions of £1 billion+ in sales and over 2 million active customers.

They also recently announced a strategic partnership with THG to integrate Frasers Plus into THG's retail platform.

Overall, Frasers Group is looking ahead to a future of “multi-year profitable growth.” For FY25, they expect to achieve another strong increase in adjusted profit before tax in the range of £575 million and £625 million.