© Reuters. Debenhams reduced its forecasts after disappointing sales
LONDON (Reuters) – The british group of department stores Debenhams was lowered Thursday its profit forecasts after disappointing sales in the fall and the beginning balances in half-tone after Christmas.
The title Debenhams was marked down 25% before the opening of the London stock Exchange, according to traders.
Like for like sales in the Uk fell 2.6% in the 17 weeks to 30 December, according to Debenhams in a press release, adding they have had to reduce its prices in front of the competition during the six weeks before Christmas and again just after during the first week of sales.
“The market has been difficult and very promotional in some of our categories seasonal the most important. We responded to remain competitive for our customers, which has impacted our profits,” explains the director general Sergio Bucher.
The group has been able to increase its comparable sales of 1.2% during the six weeks preceding Christmas, but only thanks to price cuts with harmful consequences for margins.
While Debenhams was for a gross margin decline of 25 basis points for its entire fiscal year 2018 closed at the end of September, the first half should be reflected in a decline of 150 basis points, the statement said.
The group now expects a profit before tax annual of the order of 55 to 65 million pounds (62-73 million euros).
Debenhams had achieved last year a pre-tax profit of 95 million pounds, and analysts had been pencilling in an average result of 83 million this year, according to data from Reuters.
(Paul Sandle, Véronique Tison for the French service)