British retailer Frasers on Thursday withheld its fiscal 2027 outlook, saying ongoing takeover bids for German fashion house Hugo Boss and Australian footwear chain Accent made it difficult to forecast the year ahead.
The announcement, which accompanied news that the group had missed profit forecasts for the year to April 26, sparked a near 6% drop in the Mike Ashley-owned sportswear and fashion retailer's shares in early trade.
The results highlight the growing complexity of CEO Michael Murray's acquisition-led strategy, which has expanded the Sports Direct owner's global footprint but also generated heavy goodwill writedowns and operating costs.
"We think (Frasers') complexity and its lack of liquidity will continue to weigh on its valuation, and we think its proposed acquisition of Hugo Boss may add to execution risk and its financial leverage," said RBC Capital Markets analyst Richard Chamberlain.
The group said adjusted pre-tax profit fell 4% to £538 million ($727.9 million) in fiscal 2026, missing its own forecast of £550 million to £600 million and analysts' consensus of £564.2 million, according to LSEG data.
BIDS YET TO YIELD RESULTS
Hugo Boss earlier this month rejected Frasers' takeover bid as "financially inadequate", while an independent committee of Accent's board also recommended that a takeover proposal from the group be rejected.
Frasers booked £249.9 million of impairment charges in fiscal 2026, up sharply from a £9.6 million reversal in the prior year, after fully writing down goodwill assigned to Nordic sports retailer XXL, Dutch chain Twinsport and own-brand Everlast.
It also partially impaired goodwill relating to its South African acquisition Holdsport due to weaker growth expectations.
Frasers has also been hit by challenging market conditions, subdued consumer confidence and excess inventory in recent months, which it said continued through the second half of the year and into the starting months of fiscal 2027.
"These pressures are weighing on the entire sector, creating a prolonged and challenging environment, meaning the full potential of this progress has not yet been realised," the company said in a statement.
