Group like-for-like sales at Debenhams increased 0.7% on a constant currency basis in the 53 weeks to 3 September, as strategic growth of the beauty, gift, swimwear and food categories helped to offset the weak clothing market.
Group EBITDA fell 2.2% year on year to £233.4m. Underlying profit before tax was in line with market expectations, up 0.5% to £114.1m.
The group gross margin rate fell by 10 basis points. Debenhams said further improvement in markdowns and the full-price sales mix had been delivered, despite a more promotional market background in the second half of the year.
It added that tight stock management delivered a 4.2% reduction in like-for-like stock.
Online sales grew 9.3% and now represent 14.7% of group sales. Online EBITDA rose 14%.
International profit was “broadly maintained”, as progress at Magasin du Nord, the Danish retailer it acquired in 2009, helped to offset tougher trading conditions in some of its franchise markets.
The Irish arm of Debenhams successfully completed an examinership during the year, and the business said it is now well-positioned for a sustainable and profitable future.
A Shanghai sourcing office opened in August 2016.
Sir Ian Cheshire, chairman of Debenhams, said: “We have delivered profits in line with market expectations, reflecting a strong performance over peak followed by a tougher second half trading environment. Our strategy to rebalance the business towards non-clothing has supported our performance, with strong progress in beauty, gifting and food.
“Our diversified business model together with good cash generation and reducing debt means that Debenhams is in good shape to withstand a market background that remains uncertain. Our executive team, supported by all our colleagues, are actively managing the business to increase its resilience and flexibility, which will stand us in good stead to deliver long term sustainable growth.
”Following the arrival this month of our new CEO, Sergio Bucher, we look forward to updating the market in spring 2017 on our longer term plans for the next phase of Debenhams’ development.”