Pepco Group continues to address supply chain issues

Discount retailer Pepco Group said that the year-to-date Pepco business was impacted by supply chain issues, affecting the consistent and timely availability of stock in stores.

Poundland and Dealz were also affected by the transition to Pepco-sourced clothing and general merchandise, which is being addressed and initial benefits are expected to come in FY25.

The company added that mitigating actions, which include shipping product earlier, optimising shipping routes and selectively utilising faster carrier options, are expected to improve availability during the first half of FY25.

Commenting on the pre-close trading update, Andy Bond, executive chair of Pepco Group, said in a release: “Group like-for-like revenues in the fourth quarter remained lower than the prior year, partly related to ongoing supply chain disruption, nevertheless, we expect to deliver record revenue and underlying EBITDA in FY24, driven by significant improvements in gross margin year-on-year.”

The company's year-to-date revenue increased by 10 percent on a reported basis driven by store expansion, with LFL revenues over the same period down 3.1 percent.

The group expects to report full year revenues in excess of 6 billion euros and underlying EBITDA of at least 900 million euros, approximately 20 percent higher than prior year.

The company opened 64 net new stores during the fourth quarter, expecting to finish the year with 390 new stores overall, in line with prior guidance.