High Street chain Debenhams has given a third profit warning this year as it released its latest trading figures this morning.
The group now pre-tax profits of £35m to £40m, down from £59m last year and below the market consensus of £50.3m.
The drop is partly due to a 2.1 per cent slump in like-for-like sales, from stores open more than one year, in the 41 weeks to June 16. This was despite an 11.5 per cent surge in online revenues over the same period.
It added that it was driving out further cost opportunities beyond those already announced, focusing on self-help and prioritising cash generation.
It had already issued its first profit warning after poor Christmas trading,which it blamed on bad weather and then t later revealed an 85% slump in half-year profits, blaming the Beast from the East and restructuring costs taking their toll on its bottom line in the six months to March..
Sergio Bucher, CEO, commented:
“It is well-documented that these are exceptionally difficult times in UK retail, and our trading performance in this quarter reflects that. We don’t see these conditions changing in the near future and, because it is our priority to maintain a robust balance sheet, we are making very careful choices about how we deploy capital. We see clear evidence of progress as our digital growth outperforms the market and customers respond positively to our product improvements and format trials. We have also put in place a leaner operational structure and made a number of important hires so that we are well-equipped to navigate the market turbulence.”
