Frasers Group has decreased its profit guidance for the full financial year by £25m, as its retail revenue in the first half fell by 8.4% to £2.5bn.

The firm, which owns brands including Sport Direct, Game and Flannels, said this drop in revenue was a result of planned declines in Game UK, Studio Retail and the companies acquired from JD Sports and SportMaster in Denmark.

Frasers also saw its pre-tax profit fall by 1.5% to £299m in the six months to 27 October.

The firm said that H1 had been "another period of progress" in its elevation strategy, which looks to “drive stronger relationships with the biggest global brands”, including new partners FENDI, Ferragamo and Prada Beauty.

It added that it continues to invest in UK luxury and premium retail, consolidating a market that "remains challenging but in anticipation of future improvement".

In this time, it has added 10 new stores, including a Flannels flagship, and a Frasers/Sports Direct flagship store in Sheffield.

Chief executive at Frasers, Michael Murray, said: "The first half of this year has been another period of progress for the group, delivering on our objectives as the elevation strategy continues to take the business to the next level. Sports Direct UK delivered further sales growth, and our property and financial services divisions are seeing encouraging progress.

"We continue to operate with discipline to ensure our business is as resilient as possible - proactively right-sizing recent acquisitions to set them up for profitable long-term growth and driving further automation benefits to exceed our stock reduction targets for the period. We have also made significant strides in international expansion, developing new partnerships across Australia and Africa, and unlocking opportunities as we move further towards our goal of becoming a leading global sports retailer."

Looking ahead, the firm said it "remains confident" in its plans for sustainable profitable growth.

Despite this, Frasers is expecting its adjusted profit before tax to be in the range of £550m to £600m in the full 2025 financial year, dropping from a previous prediction of between £575m to £625m.

It added that this reduction was a result of “weakened” consumer confidence before and after the Government’s Autumn Budget, with the announcement in October set to hit its costs by around £50m.

Head of equity research at Hargreaves Lansdown, Derren Nathan, concluded: "Frasers’ revenue has taken a tumble in the first half, driven by weakness in retail sales. The higher price points within Premium lifestyle felt the worst with a 14% decline.

"Investors will be hoping that the revised outlook will be enough to capture any further jitters over the vital Christmas trading period. The difficult trading environment could also provide the opportunity to snap up further brands. However, as the likes of Game have shown, focus rather than a scattergun approach should be part of the mantra.

"All in all, it’s a tricky time for the sector, but one Frasers is handling with some dexterity. Despite the downgrade, profits are still expected to be in growth territory this year."

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