Debenhams sees sales growth slow

Debenhams has announced full-year profits in line with expectations but notes sales growth has slowed considerably in the past…

Debenhams has announced full-year profits in line with expectations but notes sales growth has slowed considerably in the past two weeks.

Pre-tax profits for Britain's third-biggest department store group came in 12.7 per cent higher than last year at £146.1 million sterling, in line with forecasts.

Group turnover grew to £1.6 billion from £1.4 billion during the year to the start of September.

Debenhams has taken advantage of problems at Marks and Spencer (M&S) over the past three years, grabbing some of its rival's customers to become the second-biggest lingerie retailer in Britain, behind M&S.

READ MORE

But Debenhams revealed weaker-than-expected sales for the start of the current year. In the seven weeks to October 20th same store sales were up just 3.4 per cent, having been 8 per cent ahead during the previous year.

Nonetheless, analysts said they were prepared to give Debenhams the benefit of the doubt.

The stock was quoted effectively unchanged around 390p in early trade today, having almost doubled in the last 12 months as the retailer gained market share and outperformed rivals.

It is one of the best five performing British retail shares in the market over the past 12 months, but analysts say the rating still looks cheap compared to M&S.