16th Apr 2015 07:25
LONDON (Alliance News) - Debenhams PLC Thursday reported a rise in profit for the first half of its financial year as sales grew following a revamp of its promotional strategy and service improvements.
The department store operator said pretax profit grew to GBP88.9 million in the 26 weeks to February 28, up 4.3% from GBP85.2 million a year earlier, as revenue grew to GBP1.33 billion from GBP1.30 billion. Like-for-like sales were up 1.3%, it said.
The company said that a refocus on promotional strategy resulted in a 9% increase in own brand full price sales, with tightly controlled stock and more flexible purchasing. Service improvements also drove click & collect growth of 22.1%, with next day services accounting for 49% of orders in the seven days prior to Christmas.
Online sales were up 12.7% and international sales grew 1.5%, it said.
However, it's gross margin remained flat as weaker womenswear sales in the autumn season, an ongoing impact of sales mix from growing sales in the lower margin cosmetics category, and investment in reducing prices offset a 100 basis points benefit from reduced markdowns.
The company said it will maintain its interim dividend of 1 pence per share.
"Looking forward, our customers tell us they are feeling a little more optimistic about the economic outlook, but they remain cautious. Accordingly we are continuing to plan prudently in the near term, while remaining focused on our strategic priorities, and are continuing to invest to ensure that our business is well-positioned to drive sustainable growth in the longer term," Chief Executive Michael Sharp said in a statement.
Shares in Debenhams were trading up 1.9% at 81.13 pence early Thursday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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