British department store group Debenhams Plc (DEB.L, DBHSY.PK) said Thursday sales for the 16 weeks ended June 23 grew from last year, amid a challenging trading period and unseasonal weather. The company also said it remains comfortable with market estimates for full-year profit before tax, but sees lower gross margins.
Debenhams expects gross margin to be about 30 basis points lower than last year, compared with its prior guidance of a broadly flat gross margin. The decline in margin is due to a largely weather-related sales mix change towards health and beauty, which has a lower gross margin than own bought clothing, the company said.
For the 16-week period, Debenhams reported a 3.9 percent increase in gross transaction value and a 3 percent growth in like-for-like sales. Excluding value added tax, like-for-like sales increase was 3.1 percent. Online sales grew 34.9 percent during the period.
In an interim management statement, the company noted that sales trends have accelerated from the first half exit run-rate. In addition, it could achieve market share growth in key categories, including womenswear.
For the first half ended March 3, group gross transaction value and like-for-like sales including VAT, increased 1.4 percent. Excluding VAT, the company saw a 0.3 percent rise in like-for-like sales.
Debenhams said it opened a new 24,000 square feet store in Dumfries in May, taking the UK and Ireland portfolio to 165 stores.
In a separate press release, Debenhams announced that Adam Crozier would step down from his role as non-executive director on September 1, 2012. Dennis Millard would replace Crozier as chairman of the remuneration committee and Mark Rolfe would in turn succeed Millard as chairman of the audit committee.
DEB.L is currently trading at 81.6 pence, down 1.98 percent, on a volume of 336 thousand shares on the LSE.
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by RTT Staff Writer
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