Debenhams on Thursday reported a fall in half-year profit, blaming snow in the UK in January.
The retailer's pre-tax profits for the six months to March 2nd dropped 5.4% year-on-year to £120.3m as cold weather discouraged shoppers.
The UK was disrupted by snow during the two significant trading weeks at the end of January that marked the end of the department chain's winter sale. UK like-for-like sales were down 10% during the period.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"We took action to strengthen our promotional calendar in February but this was not sufficient to recover all those sales lost in January," the company said.
Despite the weather's hit to revenues in January, group sales were up 3.1% for the half-year boosted by strong performance over the Christmas period.
The company achieved record sales in December up 5.0% on a like-for-like basis, aided by the first Christmas brand marketing campaign for six years.
Online shopping accounted for 12.7% of overall sales growth as it rose 46%.
A gross transaction value of £1.5bn was 3.5% higher than last year as market share gains were achieved in clothing and non-clothing product categories.
During the period, the group made further progress to build its international and multi-channel brand.
The firm invested in modernising shops and transforming London's Oxford Street into its international flagship store.
The interior of the Oxford Street store will be completed in time for this year's peak trading with a phased reveal of the kinetic faade taking place between August 2013 and February 2014.
Sales disruption due to this project is in line with previous guidance of 10% and is expected to continue at this level in the second half.
The UK store portfolio stood at 155 stores at the end of the first half, up from 153 the previous year.
Net debt rose to £321.6m from £311.8m due to investments.
Debenhams maintained a dividend of 1.0p per share.
"We expect to make further progress in the second half despite consumer sentiment remaining weak and challenging market conditions," said Chief Executive Michael Sharp.
"We are committed to the opportunities afforded to us by the four pillars of our strategy to build a leading international, multi-channel brand. We are sure that this strategy is right for Debenhams and of the benefits it brings to the business and its shareholders."
RD
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the USMedium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.
