Debenhams’ focus on profit and cash generation continued to good effect in its half-year trading period to February 26th, according to a statement published by the department store group today.
Profit before tax was in line with market expectations, up 4.5 per cent year-on-year to £129.2 million, although group like-for-like sales slipped 1.5 per cent during the same period.
There was a good sales performance from own-bought ranges, while Kantar Worldpanel data shows that Debenhams has gained market share in women’s casualwear and childrenswear.
Online operation Debenhams Direct continued to grow during the half-year, with sales through this channel up by 82.4 per cent year-on-year. This will continue to be a key area of development for the business in the months ahead.
In what will be his last half-year financial statement following the announcement today that he will retire from the retailer at the end of this fiscal year, CEO Rob Templeman said he was pleased with the company’s performance.
“Debenhams has now produced six consecutive halves of pre-tax profit growth in what has been a consistently challenging retail climate,” he explained.
“Looking forward, there are some encouraging signs that commodity prices such as cotton may fall which could be positive for both consumers and retailers in terms of pricing.
“We continue to believe that our investments in infrastructure, the building of a seamless multi-channel business and the continuing improvements to the store experience through our refurbishment programme will serve us well, particularly when the retail environment begins to improve.”
Today’s trading statement also showed that the group’s gross transaction value increased 3.2 per cent, while its gross margin was up 20 basis points.
Earnings per share were up 14.5 per cent from 6.2p to 7.1p, and net debt was reduced by £165.2 million during the six months to £351.6 million.