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Debenhams edges forecasts in tough market conditions

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Department store Debenhams (LON:DEB) increased interim sales and pre-tax profits as it battled unusually warm weather in the autumn and a challenging retail climate.

The company which has 170 stores in the UK, Republic of Ireland and Denmark increased revenues by 1.3 per cent to £1.24 billion in the six months to 3 March.

Pre-tax profit increased by 1.4 per cent to £127.1 million from £125.3 million and ahead of analysts consensus of £124 million. However profit margin was down 30 basis points as it sold more health and beauty products.

Like-for-like sales rose by 1.4 per cent and by 0.3 per cent excluding VAT.

Chief executive Michael Sharp said the company was pleased with the first half given the difficult economic environment and the impact of unfavourable weather in the autumn, which affected sales of outerwear.

Sharp added the company is comfortable with market forecasts for the current year, but said the outlook for the next six months is unclear.

“We are mindful of the impact the wider economy may have on consumer behaviour in the second half of the year as well as the uncertain effects of the major one-off events taking place in the UK during the summer.”

The company also announced a long-term share buyback programme with an initial £20 million over the next six months.

 

 

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