Mike Ashley’s fashion group Frasers said on Thursday it expected higher profit next year, after a ‘record-breaking’ 2022 driven by store reopenings and high demand for its sportswear, sending its shares 16 percent higher.

The company, owner of Sports Direct, forecast adjusted profit before tax of £450 million to £500 million ($600 million) for the next financial year.

Frasers, established in 1982 as a sports shop in Maidenhead, has 769 stores in the UK, with brands like Sports Direct, House of Frasers, Flannels and Jack Wills under its banner.

“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,” chief executive officer Michael Murray said.

“Linked to these are the cost-of-living pressures facing many of our consumers,” he said, adding that the company has been conservative in its profit forecast.

Murray, the partner of Mike Ashley’s daughter, took over as CEO from founder Ashley in May.

Surging petrol and food prices pushed Britain’s inflation to a four-decade high last month, forcing many Britons to cut back spending on non-essential items.

Fraser’s UK sports retail revenue increased by 31.2 percent to £2.58 billion for the year ended April 24.

“Sports Direct should benefit from consumers becoming more price conscious in a downturn, however as a fairly low-margin discounter, Frasers is relatively exposed to potential cost and currency pressures on its business in the medium term,” analysts at RBC said.

Frasers’ larger rival JD Sports Fashion has also remained resilient amid the cost of living crisis in Britain.

London-headquartered Frasers said adjusted profit before tax came in at £344.8 million for the year, compared to a loss of £39.9 million in the previous year.

Group revenue increased by 31 percent to £4.75 billion.

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