Debenhams : Christmas Trading Update

RNS Number : 5066L



12

DEBENHAMS PLC

CHRISTMAS TRADING UPDATE

Good strategic progress drives strong Christmas trading performance

, the leading international, multi-channel brand, today announces its trading update for the 19 weeks to 9.

Financial Highlights

· Group gross transaction value +2.5%

· Group like-for-like sales +3.5% in constant currency; +1.9% as reported

· Online sales +12.1%; click & collect penetration has risen to 31%

· Gross margin within FY16 guidance of +0 to +50bps

· Strong performance in the 7 week Christmas period to 9 January:

- LFL sales +3.7% in constant currency, two year growth of +7.1%; +1.8% as reported

- Online sales +15.4%, +26% over two years

Operational Highlights

· Further progress on strategic priorities set out at the Prelims in delivered a strong trading performance, with the Christmas week achieving record sales

· Less discounting and a lower level of promotional activity led to full price sales growth of 5%, supported by planned reduction in stock levels across clothing, particularly in weather-sensitive categories

· Black Friday, which falls within our existing promotional calendar, traded successfully and profitably with good year on year growth both in stores and online

· Continuing service improvements delivered a further uplift in online performance over peak, with click & collect penetration peaking at 46% in the pre-Christmas period and strong growth in premium delivery services

· As planned, five new stores opened between September and : in , Wandsworth, , Beverley and Newport

· Internationally, Debenhams performed in line with expectations, with Magasin du Nord in delivering a record Christmas and further strong momentum in constant currency

, Chief Executive of Debenhams, said:

'We have traded well in the first 19 weeks of the financial year with a strong performance over peak resulting in a record Christmas. This performance is evidence that our strategy is working with our customers finding our mix of products and brands both compelling and great value for money. The further improvements to our service proposition and our online presentation have delivered strong multi-channel sales growth, building on the progress we saw last year.

'I would like to thank all our colleagues for their continued hard work and support which has ensured that we traded our peak period successfully and with our systems and fulfilment working well. We remain on track to deliver full year profits in line with market expectations.'

Performance in the first half to date

In the 19 week period, Group gross transaction value rose by 2.5%, with like-for-like growth of 3.5% in constant currency, 1.9% as reported.

Further progress on our strategic priorities has supported our performance, delivering a good Black Friday and Christmas trading outcome and full price sales growth across the period of 5%. A planned reduction in outerwear clothing stocks has enabled us to trade a difficult autumn clothing season successfully and we entered the sale period post-Christmas with less stock than in the prior year, in line with our expectation. Strong growth in Beauty has reinforced our market leadership in the premium segment and despite tough comparatives over peak, sales across gift categories have shown good further growth. Non-clothing categories now account for 55% of total revenues, in line with our strategy.

Online sales have delivered continuing positive momentum in the 19 week period, growing 12.1% and with stronger growth over peak. This reflects increasing customer confidence in our service proposition as well as later cut-off times, the extension of endless aisle to improve availability, and more competitive premium delivery charges. We have made further improvements in our online presentation, with mobile orders our fastest-growing channel. As expected, click & collect penetration has continued to increase, growing at 45% year on year and accounting for 31% of online orders in H1 to date.

International sales grew in line with expectations, with Magasin du Nord continuing to deliver good growth and record Christmas trading helped by a recovering Danish economy.

Sales performance

	THIS YEAR		LAST YEAR
Percentage change to last year	19 wks to 09/01/16	7 wks to 09/01/16	19 wks to 10/01/15	7 wks to 10/01/15	FY 15
	%	%	%	%	%
Group Gross Transaction Value	2.5	2.9	0.2	3.3	1.3
Constant currency LFL	3.5	3.7	0.3	3.4	2.1
Reported LFL	1.9	1.8	(0.8)	2.4	0.6

-ENDS-

A conference call for analysts and investors will be held at today. To join the call, please dial [phone] (/) or [phone] (US), PIN 9914197. A recording of the call will be available for seven days on [phone] or [phone], PIN 9914197

Enquiries:

Analysts and investors

Debenhams PLC , Chief Financial Officer

, Director of Investor Relations

020 3549 6304

Media

Brunswick Group /

020 7404 5959

Notes to editors

Debenhams is a leading international, multi-channel brand with a proud British heritage which trades out of over 250 stores across 27 countries. Debenhams gives its customers around the world a unique, differentiated and exclusive mix of own brands, international brands and concessions.

Debenhams has been investing in design for over 20 years through its exclusive Designers at Debenhams portfolio of brands. Current designers include , , , , and , , , , , , Todd Lynn, , , , , , , and , and .