• H1 pre-tax profit up 4.3% to GBP88.9m
  • Revenue increases 1.6% to GBP1.33bn
  • Management “pleased” with performance
Debenhams said it was “pleased” with its first-half performance

Debenhams said it was “pleased” with its first-half performance

Department store retailer Debenhams has recorded a better-than-expected set of first-half results, after making "good progress" against its strategy to become a leading international, multi-channel brand.

Pre-tax profit reached GBP88.9m (US$132.7m) for the 26 weeks to 28 February, compared to GBP85.2m in the same period of the prior year.

Group revenue rose 1.6% to GBP1.33bn from GBP1.30bn last year, while like-for-like sales up were up 1.3%. In the UK, revenue increased 1.7% while international reported a 1.2% gain.

Gross margin, meanwhile, was flat year-on-year.

The UK company said it made "good progress" against its strategic priorities to deliver long-term sustainable growth during the period. Refocusing its promotional strategy resulted in a 9% increase in own brand full price sales, with tightly controlled stock and more flexible purchasing strategies.

Multi-channel continued to grow, with online sales growing 12.7%, while mobile penetration now accounts for 42% of online sales.

"I am pleased with the good progress we have made against the strategic priorities we set out last year," said CEO Michael Sharp, adding: "Overall we delivered a good first half performance despite a difficult clothing season in autumn and we are on track to achieve full year expectations."

With consumers remaining optimistic, Sharp said Debenhams continues to "plan prudently" in the near term, while remaining focused on its strategic priorities, and will invest to ensure the business is well-positioned to drive sustainable growth in the longer term. For fiscal 2015, the retailer expects gross margin to be at the lower end of 10-40 basis points growth.

N+1 Singer analyst Matthew McEachran described the trading update as "reassuring", adding that it confirms progress is emerging in key areas.

Investec analyst Kate Calvert added: "While management is pleased with its progress towards its strategic priorities, we believe these results confirm our view that any gross margin benefit from lower markdowns/promotions will need to be reinvested into the offer."