Pepco strong in H1 and Q2 as store expansion continues
Pepco’s latest set of results on Thursday showed “strong strategic progress and trading growth achieved despite a challenging trading environment” for the budget retail giant.
The pan-European owner of the Poundland/Dealz and Pepco chains said first-half group revenue (the period to March 31) rose 17.5% year-on-year (YoY) to €2.371 billion. This was led by Pepco delivering 28.9% growth.
Like-for-like sales rose 5.3% and growth accelerated in Q2 to rise 12.1%.
The Pepco chain’s like-for-likes were up 18.5% in Q2 and 7.2% in H1; and Poundland Group’s rose 5.9% in Q2 and 3.3% in the half year.
Half-year underlying EBITDA is anticipated to be within a range of €342m to €350m and it means the group is still on track to meet guidance for the full year “in the absence of any further significant deterioration in the macro environment”.
The six-month period saw “significant new store expansion” continuing across all trading brands with openings ahead of guidance and the historic run rate. It opened 235 net new stores, excluding the impact of 43 Fultons stores closed following acquisition.
Pepco saw a record 202 net new store openings, including 84 in Austria, Italy and Spain, where initial performance remains strong.
Poundland Group saw 33 net new stores and these included several megastores that have a much larger space dedicated to the Pep&Co fashion range.
Interim CEO Trevor Masters said: “We are very pleased with this set of results, considering the global disruption faced by our business. We have maintained our focus on our strategic priorities, in particular our new store growth and our continued re-fit programme, both of which continue to delight our customers and deliver strong financial performances.”
But he added that while the impact of Covid-19 progressively eased over the second quarter, “the invasion of Ukraine, a country which borders three of our largest operating territories, created further volatility and unpredictability”.
The company has donated money to various charities to help the people of Ukraine and those at the border of Poland and has used its employee assistance schemes “to support our impacted colleagues and introduced paid volunteering days for our staff based in the CEE”.
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