Debenhams to meet profit forecasts
Debenhams has announced that it will meet its annual profit expectations as it reports an increase in like-for-like sales in its final quarter.
The department store group said full-year pre-tax profit is expected to be ahead of last year and in line with expectations of around £156 million, up from £152 million.
In the ten weeks to 1 September sales at stores open over a year rose 3.7%, excluding VAT. In the 52 weeks to 1 September, like-for-like sales grew by 2.3% including VAT and 1.6% excluding VAT driven by market share gains in womenswear and other key categories. There was also strong growth in the group’s international businesses. The group said its modernised stores were performing well.
Debenhams achieved a 40% increase in online sales in the 52 week period with visits to debenhams.com increasing by over 50% helped by 27% growth in its mobile channels.
Chief executive Michael Sharp said: "To deliver LFL sales growth in these extremely challenging market conditions is highly creditable and we achieved this result by relentlessly focusing on our customers.
"We do not anticipate a significant change in the economic environment in the near future but we expect to continue to make progress in 2013."
Gross margin for the 52 weeks to 1 September 2012 is expected to be in line with guidance of 30 basis points lower than last year, largely due to a weather-related sales mix change towards health and beauty as well as higher concession sales.
Debenhams said it is continuing to invest in key areas of the business to help deliver sustainable, long-term sales growth while maintaining strong cost control. These include product development in buying and merchandising, marketing, customer analytics and activities to support its multi-channel business.
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