Debenhams PLC (LON:DEB) has cautioned about “current market volatility” with the department stores group warning that if it continues its full-year pretax profits outcome could be “towards the lower end of the current range” of market expectations.
In a trading update, the group said its like-for-like sales were down 0.9% in the 15 weeks to June 17, with the fall at constant currency rates 2.4%, while group gross transaction value was down 1.0%.
In the 41 weeks to the same date, Debenhams like-for-like sales were up 1.8%, but down 0.7% at constant currency, with group gross transaction value up 1.7%.
READ: Debenhams considering 10 store closures and plans to enhance its digital offering
The firm said digital sales growth was strong, however, up 7.9% for the 15 week period, and 12.6% for the 41 week, driven by mobile demand which was up 47% year-on-year.
Debenhams has left its full year margin guidance unchanged at -0.25%, but tightened its cost guidance to +3%, or +1% in constant currency.
The company said “the UK trading environment has been more volatile in the second half of our trading year.
“However, our targeted destination categories of Beauty, Accessories and Food & Drink have helped to mitigate the impact of a weaker clothing market.”
Sergio Bucher, Debenhams CEO, who took over in October, said: "As industry data has confirmed, May was a tough month for retailers and we continue to see volatility in trading week to week.
“As a result we are focused on delivering cost control and self-help through our "Fix the Basics" plan. We continue to build good foundations for longer term growth at Debenhams by becoming a Destination, Digital and Different."
In a post-results note to clients, analysts at Liberum Capital said: “There is positive commentary in the statement regarding progress on the new “Debenhams Redesigned” strategy, but recent trading will be taken as disappointing by the market today.”
Illustrating this, in early morning trading, Debenhams shares were down 3.4%, or 1.5p at 43.0p.
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