Debenhams saw underlying pre-tax profits fall 21% to £110.3m despite like-for-like sales increasing by 1% for the full year to August 30. Gross transactional value rose 1.7% to £2,823.9m.
The company said its performance had improved in the second half of the year against the strategic objectives it outlined in April to deliver long-term sustainable growth and address first half operational issues. Operating profit fell by 22.9% in the first half of the year and increased by 2.9% during the second half. Chief executive Michael Sharp said the department store remained “cautious about the outlook.”
Debenhams said refocusing its promotional strategy resulted in a 10.6% increase in own brand full price sell-through in the second half. It also noted encouraging early signs from deals with Sports Direct, Costa, Monsoon and Mothercare, which have taken space in stores.
Online sales were up by 17.6%, representing 15.3% of group sales during the period, which saw new online delivery options become available including next day click-and-collect and 10pm cut-off for next day delivery to home.
The Oxford Street transformation was completed on plan and is trading in line with expectations. The retailer also noted strong debut seasons from Designers at Debenhams Patrick Grant, Stephen Jones and Todd Lynn.
Sharp said: “After the challenges we faced in the first half, everyone in the business has been focused on addressing the issues we identified and on delivering on the priorities we set out in April to deliver long-term sustainable growth. Our performance in the second half reflects this with operating profit up on the previous year.
“We achieved higher full price sales and fewer days on promotion as a result of greater clarity on our promotional calendar resulting in an improved gross margin. We have also made good progress on our work to drive better returns from our space.”