Matalan narrowed its pre-tax loss to £54.7 million as stronger margins and higher investment supported its turnaround plan.
The fashion and homeware retailer posted a 24 per cent rise in adjusted EBITDA to £69.4 million in its full-year 2026 results.
Revenue slipped to £971.2 million from £985 million on a like-for-like basis, although the latest financial year covered 53 weeks compared with 52 weeks the year before.
Gross profit rose six per cent to £538 million, helped by lower bought-in costs, reduced freight rates and favourable foreign exchange hedges.
Matalan said these gains more than offset its investment in discounting to drive footfall in a “highly promotional” market.
The retailer said more than 90 per cent of its AW25 and SS26 ranges were priced at £30 or below, as it continued to focus on value-led fashion and homeware.
Matalan gained 0.3 points of volume market share in the second half, according to Numerator Worldpanel data covering clothing, footwear and accessories, with womenswear leading the improvement.
The retailer also completed 30 store refreshes during the year. Refitted stores outperformed the wider estate by around 12 per cent and delivered like-for-like sales rises of 10 per cent after refurbishment.
Matalan plans to refresh 40 stores in FY27, including 14 of its traditionally best-performing shops, and will open or relocate at least 10 stores.
A new app is also due to launch later this year as the retailer invests further in digital growth.
The business has also been exploring expansion into Ireland after appointing Savills to identify potential retail park locations.
Matalan chief executive Henrik Nordvall, who joined the retailer on February 2, said: “We delivered strong EBITDA growth and improved gross margin in the period, despite a challenging and highly competitive retail environment, all while continuing to invest in the areas that are driving growth.”
The retailer said trading had improved further in the first quarter of FY27, with revenue up two per cent year on year and adjusted EBITDA rising 45 per cent to £14.9 million.
Matalan also reported both volume and value market share gains during the quarter.
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