Variety discount retailer Pepco has recorded a dip in like-for-like revenues as supply chain disruption and “company-specific issues” impacted sales.
The group, which owns Pep&Co, Dealz and Poundland, saw overall revenue decline 4.3% to €1.48bn (£1.24bn) in the third quarter ending June 30.
The company said this reflected the earlier timing of Easter, which fell into the second quarter, as well as a delay in summer stock hitting shelves “partly due to issues in the Red Sea”.
Pepco revenue fell 2.7% on a like-for-like basis to €929m (£782m) while Poundland and Dealz saw like-for-like revenue fall 6.9% and 7.3% respectively to €480m (£405m) and €72m (£60.6m).
The group said the decline at Poundland stemmed from “challenges related to the introduction of new Pepco-sourced clothing and general merchandise”, which are now being addressed.
Pepco Group maintained guidance for its full-year EBITDA outlook of around €900m (£758m), up from €753m (£635m) last year.
It added that is “confident” that availability issues that impacted like-for-like sales will ease through the fourth quarter as it is mitigating the Red Sea impact by “shipping product earlier and channelling stock through different shipping routes”.
Pepco Group executive chair Andy Bond said: “We have continued to execute against our strategy to deliver more measured growth – doing less, to achieve more – with a greater focus on improving profitability.
“Group like-for-like revenues in Q3 were below our expectations, partly due to macro factors, such as ongoing supply chain disruption, and company-specific issues, including slower-selling older stock, which is being removed through markdown, as well as the transition to Pepco-sourced clothing and general merchandise in Poundland and Dealz.
“We are actively improving the availability and breadth of our ranges, and expect to benefit from these actions in the new financial year.
“Looking ahead, the group remains confident of delivering underlying EBITDA of around €900m (£758m) this financial year and exiting the year with an improved trajectory in like-for-like sales in our core Pepco business.
“Our strong customer proposition and market-leading pricing leaves us well placed for future success as Europe’s leading variety discount retailer.”
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