Online retail group Debenhams has revealed earnings bounced back into profit for the past six months as sales strengthened.
The retailer, which also owns the Boohoo and Pretty Little Thing brands, said it expects earnings to continue to improve after efforts to cut costs as it makes progress with its major turnaround plan.
Boss Dan Finley said: “Our turnaround continues at pace.
“This is a strong first half and, importantly, one where growth accelerated as we went through it.”
Debenhams told shareholders that gross merchandise value (GMV), the group’s preferred sales measure, increased by 1.8% in the six months to August 31, compared with a year earlier.
It reported that growth of 0.5% in the first quarter accelerated to 2.9% in the latest quarter.
Growth was particularly driven by the Debenhams brand, which revealed a 14.1% sales increase, while Pretty Little Thing, Boohoo and Karen Millen all returned to growth.
The retail firm also revealed reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £20 million for the half-year, swinging from a £3 million earnings loss a year earlier.
It said this was linked to an 83.5% fall in exceptional costs to £4 million.
Bosses said they expect a “continued material improvement” in earnings and a return to profitability for the year.
Debenhams said it is on track with plans to secure £100 million in cost savings by next year.
The group also said it hopes to reduce its net debt from £102 million to “negligible” levels after selling off parts of its business in recent weeks.
On Tuesday, Debenhams revealed the sale of women’s fashion brand Nasty Gal for 16 million US dollars (£11.9 million) to WSG brands.
It came a week after the company announced the sale of its Sheffield warehouse for £90 million to Primark, which plans to use the site to support home deliveries.
Mr Finley added: “With the cost programme ahead of plan, lease costs falling and net debt down year on year, we are reiterating our guidance of double-digit adjusted EBITDA growth and free cash flow in full-year 2027.
“Since the half-year end, the Sheffield distribution centre and Nasty Gal disposals mark a further significant step in reducing leverage, and we now expect net debt to be negligible at our February 2027 year end.”
This article was written by Henry Saker-Clark from The Independent and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.