Big freeze hits Debenhams’ profits
DEPARTMENT store chain Debenhams warned today that profits will miss expectations after January's snowstorms blew a hole in sales figures.
Underlying revenues were 10% lower in the affected period between January 14 and 27, compared with a 5% rise over Christmas and New Year.
It held promotional events during February in a bid to recover the lost sales but the consequent impact on margins means profits for the six months to March 2 will be around £120 million, against £128.5 million a year earlier and City forecasts in the region of £131 million.
Chief executive Michael Sharp said he was confident that spring and summer ranges will put the chain back on track.
He added: "Whilst the impact of the snow on the outcome for the first half is disappointing, it is now behind us and sales volumes have recovered."
The group, which has 155 UK stores and 73 overseas outlets, enjoyed record December trading despite intense competition.
As a result, like-for-like sales still grew by 3% for the first 26 weeks of the financial period, even when including the snow disruption.
However, gross margin for the year is now likely to be flat, rather than the 0.1% increase previously indicated by the company.