Debenhams has announced its trading update for the 15 weeks to 11th June. LFL sales grew by 0.2%, with online sales up 7%. In the 15 week period, gross transaction value rose by 0.5%, taking the cumulative YOY performance to growth of 1.3%.
Debenhams expects growth to be impacted the National Living Wage introduction and volatile trading environment, but expects full year results to be in line with expectations.
Chief executive Michael Sharp says: "Our strategy remains unchanged, with further progress in driving our non-clothing mix, continuing to improve service for multichannel customers, and offering a wider choice of products and services in under-optimised space. In response to more uncertain trading conditions in this period, particularly in clothing, we have focused on managing stock and margins and generating cash.
"I am confident that I am leaving the business in the hands of a very strong management team, who will continue to execute our strategy and support our new CEO, Sergio Bucher, through the next phase of Debenhams' development. Our wide product choice, clear destination departments and improving service proposition gives us a strong platform from which to deliver long-term sustainable growth."
Connor Campbell, a senior market analyst at www.spreadex.com, comments: "With the spectre of BHS looming large over the UK high street it wasn’t the best time for Debenhams to announce a drop in third-quarter sales.
"Like-for-likes fell 0.2% in the 15 weeks to 11th June, with that sales decline becoming 1.6% when the effects of currency movements are discarded. It wasn’t all bad news, however – online sales jumped 7%, something that may only continue to grow when former Amazon fashion head Sergio Bucher takes over as CEO later this year. Yet for now investors were suitably spooked by Debenhams’ figures, the stock plunging 5% after the bell."