Pepco Group posts drop in like-for like revenue following supply chain disruption
Pepco Group, the parent company of Poundland, Dealz and Pepco, has seen its group revenue rise by 8% year-on-year at constant currency to €1.481 billion.
However, group like-for-like revenue declined by 4.3% in the three months to 30 June after like-for-likes at Poundland dropped by 6.9% following challenges relating to the introduction of new Pepco-sourced clothing and general merchandise.
Like-for-like revenues at Pepco were also down, falling by 2.7% due to the earlier timing of Easter this year, slower-selling older stock, and supply chain issues.
Meanwhile, like-for-like revenues at Dealz were down 7.3% in the period.
Andy Bond, executive chair of Pepco Group, said: “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.”
Pepco Group said a strong year-on-year recovery in gross margin continued into the third quarter, driven by Pepco.
In the current financial year, Pepco Group has delivered 326 net new store openings and remains on track to open around 400 net new stores in FY24.
Outlook and full year EBITDA guidance
The group still expects its full year EBITDA to grow by around 20% to €900 million.
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.”
He added: “Looking ahead, the group remains confident of delivering underlying EBITDA of around €900 million 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.”
