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Debenhams 15-week LFL Sales Down 1.7%; Sees FY Pretax Profit Below Consensus

Debenhams plc (DEB.L) announced, against a background of increased competitor discounting and weakness in key markets, the Group's trading in May and early June has been below plan despite weak comparatives. For the 15 weeks to 16 June 2018, group like-for-like sales were down 1.7%; in constant currency like-for-like sales were down 2.2%. For the 41 weeks (financial year to date) to 16 June 2018, group like-for-like sales were down 2.1%; in constant currency like-for-like sales were down 2.6%.

The Group reassessed its expectations for the balance of the year and now expects pre-tax profit for fiscal 2018 to be in the range of 35 million-40 million pounds, with EBITDA in the range 160 million-165 million pounds. This is compared with current market pretax profit consensus of 50.3 million pounds. The Group also intends to conduct a strategic review of non-core assets, aiming to focus investment behind its strategy.

Sergio Bucher, CEO, stated: "It is well-documented that these are exceptionally difficult times in UK retail, and our trading performance in this quarter reflects that. We don't see these conditions changing in the near future and, because it is our priority to maintain a robust balance sheet, we are making very careful choices about how we deploy capital."

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