The fashion group founded by billionaire Mike Ashley, Frasers Group (GB:FRAS) has reported a ‘record-breaking’ 2022, and says it expects profits to rise next year despite a “significant increase” in running costs.
The business, which includes brands such as Sports Direct, House of Frasers, Flannel, and Jack Wills saw adjusted pre-tax profits hit £344.8m for the year until April.
Frasers Group shares jumped 6% on the news, which came amid store reopenings and high demand for sportswear.
Challenges in the retail sector
The company expects an adjusted pre-tax profit of £450-£500m over the current financial year.
Chief Executive Officer Michael Murray – the partner of Mike Ashley’s daughter – said, “We are alive to the challenging economic conditions at present, with inflationary pressures and supply-chain disruption causing challenges for many businesses operating in the retail sector,”
“Linked to these are the cost-of-living pressures facing many of our consumers.”
Murray took over as CEO in May this year.
View from the City
According to TipRanks’ analyst rating consensus, Frasers Group’s stock is a Moderate Sell. That’s based on one sell rating from Richard Chamberlain at RBC Capital.
Chamberlain’s price target of 675p implies downside potential of -29.13%.
Chamberlain is rated two-and-a-half stars in TipRanks rating system, with 48% accuracy.
These cheering figures come amid a troubling time for the British economy – and the promise of more profit rises to come should be cheering for investors.