Frasers Group’s revenue is being watched as the Sports Direct owner faces cost of living pressures

Frasers Group, owners of Sport Direct, is hoping to show continued strong sales momentum next week despite the pressure on consumer spending.

Retailers have broadly endured a tough 2022 as rising cost inflation and worries about shoppers’ cost of living weighed on profits.

However, Mike Ashley was one of the few in the industry whose shares rose over the past year after returning to record earnings.

Frasers, which also owns the House of Fraser and Flannels brands, reported pre-tax profit of £344.8m for the year to April and is targeting a further increase to between £450m and £500m in the current financial year.

On Thursday, December 8th, the company will update shareholders on how it is meeting this guidance when it releases trading numbers for the trailing six months.

The retailer has linked strong sales, which are up over 30% last year, to its growth strategy under Michael Murray, Mike Ashley’s son-in-law, who took over full reins earlier this year.

Matt Britzman, an equity analyst at Hargreaves Lansdown, said the company’s ramp-up strategy “appears to be well underway” after a series of store openings and transactions under the new leadership.

“Now that Mike Ashley has stepped down from the board, we await changes in strategic direction from the current CEO, Michael Murray,” he said.

“Frasers also wants to expand its digital presence.

“As part of that push, they’ve acquired Missguided and I Saw It First, and it will be interesting to see how well the integrations perform in next week’s half-year results.”

The company continued its acquisition streak last month with a deal to buy historic Savile Row tailor Gieves & Hawkes.

Investments in post-pandemic stores, improved online services and marketing spend also benefited the company’s core brands.

Analysts at Numis said that Sports Direct was a growth driver as it is likely to lead to an acceleration in organic sales growth.

“Sports Direct’s core banner is in good shape, benefiting from improved access to products, more flagship stores and an improved online offering,” they added.

“With brand relationships at their healthiest ever, increasing visibility and confidence in the UK estate’s earnings prospects, Frasers is increasingly well positioned to consolidate the European sports retail sector.”

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