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Matalan warns profits to drop after ‘difficult’ December

Matalan has warned that its EBITDA for the full year to the end of February will be lower than originally forecast, blaming mild weather and difficult trading conditions in December.

The company has revised its full-year EBITDA down to between £54m and £56m, from between £60m and £65m which it had previously announced at its second quarter trading update on October 12.

It comes as the value retailer reported online sales fell by 50.9% to £2.7m in the peak Christmas period, while store sales fell by 6.4% to £133.8m.

The full price sales mix increased 2.6% during the five-week period ending January 2.

For the third quarter ending November 28, the company increased total revenue by 1.5% to £302.5m for the 13-week period, while EBITDA fell 18% to £32.3m. The firm had a closing cash position for the quarter of £60.5m.

Managing director Jason Hargreaves said the third quarter results were a significant improvement on the first half of the year and were achieved in a “particularly challenging market”.

“Importantly, our supply chain responded well, demonstrating the progress made by the Liverpool warehouse in delivering better in-store availability for customers. Work is now underway to repeat this improvement online.

“Difficult trading conditions into December such as extremely mild weather inhibited footfall and drove increased discounting across the market,” he said.

Readers' comments (1)

  • EBITDA is used to dress up figures and generally does not adhere to accounting principles.

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