DEPARTMENT store chain Debenhams said it had achieved strong like-for-like sales growth throughout the year, despite challenging markets, in a trading update today.
The statement, ahead of the release of the group’s full year results on October 25, also revealed a 40% boost to online sales, good growth in its international stores, and that it expects pre-tax profits to be ahead of last year, line with current market expectations.
Debts have also been cut back, today’s update claimed.
Chief executive Michael Sharp said: “I am delighted with our strong performance and the progress we have made in 2012.
“To deliver like-for-like sales growth in these extremely challenging market conditions is highly creditable and we achieved this result by relentlessly focusing on our customers.”
He added: “This performance is clear confirmation that our strategy to build a leading international multi-channel brand is beginning to work.
“It is also evidence of the calibre of the team charged with delivering this strategy and I would like to offer my sincere thanks for the hard work of all 30,000 employees during the year.
“We do not anticipate a significant change in the economic environment in the near future, but we expect to continue to make progress in 2013.”
The chain, which opened its flagship store in Liverpool One in 2008, said its modernised stores in the UK are achieving a sales uplift of about 6% in their first year since modernisation, and those in their second year are registering a 1.5% improvement in sales.
Analyst Mathew McEachran from broker Singer Capital Markets, recommended the chain’s stock as a ‘buy’ on today’s update.
He said: “Debenhams has ended the year on a high, delivering like-for-like growth of 3.7% in the final 10 weeks to the end of August.
“This clearly contrasts comments made by Next last week and confirms good market share gains, which we believe are accelerating on the back of the strategic initiatives.
“We expect some smallish upgrades to full year profits before tax today, but it should be noted that this includes some reinvestment in quarter four into marketing and especially staffing.
“Despite net debt being £15m higher than forecast, Debenhams, therefore, finds itself in a strengthening position which we believe is not yet fully factored into the valuation.”
