Debenhams Q3 like-for-like sales down 0.2 percent

Debenhams in its trading update for the 15 weeks and the 41 weeks to June 11, 2016 said that group gross transaction value for 15 weeks increased by 0.5 percent and by 1.3 percent for 41 weeks. But like-for-like sales declined 0.2 percent for 15 weeks and increased 0.7 percent for 41 weeks. Constant currency like-for-like sales were down 1.6 percent for 15 weeks and up 1.2 percent for 41 weeks. The company reported online sales growth for the 15 weeks of 7 percent and 9.1 percent for 41 weeks.

Commenting on the development, Michael Sharp, Chief Executive of Debenhams, said, "Our strategy remains unchanged, with further progress in driving our non-clothing mix, continuing to improve service for multi-channel customers, and offering a wider choice of products and services in under-optimised space. I am confident that I am leaving the business in the hands of a very strong management team, who will continue to execute our strategy and support our new CEO, Sergio Bucher, through the next phase of Debenhams' development.”

Performance in the second half

In the 15 week period, Group gross transaction value rose by 0.5 percent, taking the cumulative year-on-year performance to growth of 1.3 percent. The company said owing to the weaker UK trading environment since the New Year, particularly in clothing, its strategy to increase the mix of non-clothing sales has supported its performance, with health and beauty sales in particular continuing to show good growth. As a result, it expects to end the year in a clean seasonal stock position.

Online sales grew by 7 percent against strong comparatives in the 15 week period, with cumulative growth for the year to date of 9.1 percent. The company expects to see positive trends in mobile, which now represents over 50 percent of UK online orders and strong growth in Click & Collect, up 19 percent year on year.

Announces plans to drive growth

Debenhams plans to roll out a further 18 Jack & Jones concessions by October and launching Claire's Accessories in 15 stores. Having trialled two furniture display concepts in Manchester and Gateshead, it is opening a further six for the Autumn/Winter season.

Group gross margin for FY 2016 is now expected to be flat, compared with previous guidance of 0 bp to 50 bp, reflecting the response to more challenging trading conditions in the second half and PBT is expected to be in line with the market expectations.

picture:debenhamsplc.com