Debenhams attributes 4% profit hike to sales promotion and online deliveries

Debenhams has reported better-than-expected half-year results, with profit before tax up 4.3% to £88.9m and like-for-like sales up 1.3%.

Debenhams: Christmas 2014 ad campaign
Debenhams: Christmas 2014 ad campaign

The performance has been driven in part by aligning its New Season Spectacular marketing promotion with consumers' paydays.

For the 26 weeks to 28 February, online deliveries grew 12.7%. The £88.9m profit beat many analyst predictions, with some expecting the figure to be lower than last year's £85.2m, forecasting it at £84m.

The department store moved its New Season Spectacular promotion forward a week during the period, which it said aligned it with the "payday cycle, enhancing like-for-like sales by circa 1% and profits before tax by circa £3m".

Michael Sharp, Debenhams’ chief executive, also attributed the group's performance to the introduction of premium delivery options for the peak period.

Sharp said: "The continued refocusing of our promotional strategy delivered a strong increase in full price sales, an improvement in value perception and enabled us to end the half with an improved stock position.

"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."

Looking ahead, Sharp envisaged a greater degree of consumer optimism, but reckoned sentiment would "remain cautious".

He said: "Accordingly we are continuing to plan prudently in the near term, while remaining focused on our strategic priorities, and are continuing to invest to ensure that our business is well-positioned to drive sustainable growth in the longer term."

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