UK: Cold weather hits Debenhams Q3 sales growth
- Q3 like-for-like sales were flat
- Online sales jumped 40%
- Company expects trading conditions to remain challenging
UK department store operator Debenhams has today (27 June) blamed cold weather and challenging market conditions for slower third-quarter sales growth.
Like-for-like sales were flat during the 16 weeks to 22 June, after poor spring weather dampened demand for new season ranges. Online sales, meanwhile, jumped 40% and accounted for 14% of total sales.
Year-to-date like-for-like sales climbed 2.1%, while online sales grew 43.9%.
Chief executive Michael Sharp said: "Debenhams has delivered a robust performance, continuing to grow market share in our key categories in a challenging and volatile period.
"We have managed the business to reflect the market conditions, with a strong focus on stocks, margins and costs. We are also making good progress on the four pillars of our strategy to build a leading international, multi-channel brand."
Looking forward, the company expects trading conditions to remain challenging in the balance of the financial year as consumer sentiment continues to be weak.
"At this stage, we are comfortable with the range of market expectations for profit before tax for the full year," Sharp added.
Debenhams said the transformation of its Oxford Street store into its international flagship is on schedule to open in December, and create 430 jobs. It also expects to open 25 stores, starting with ten in 2014.
Commenting on the expansion, Conlumino analyst Neil Saunders said: "We remain positive about international expansion, especially on the franchise front where store opening remains strong into 2014. This, allied with Debenhams' multichannel proposition, provides a very opportunity for future growth."
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