Shares in Debenhams Plc (LON:DEB) have jumped more than five percent in today’s session after the mid-cap retailer’s first-half pre-tax profit surpassed market expectations. As of 10:15 BST, Debenhams’ share price had added 5.03 percent to 83.60p, outperforming the FTSE 250 index which currently stands 0.46 percent lower at 17,791.60 points. The retailer’s shares have gained about three percent over the past year.
Debenhams said today in a statement that its pre-tax profit had jumped 4.3 percent year-on-year to £88.9 million in the 26 weeks to February 28, 2015. Reuters notes that the result was ahead of a company-compiled forecast of £84.5 million. The department stores chain saw its like-for-like sales rise 1.3 percent during the period, while reported earnings per share came in 5.4 percent higher at 5.9p. Debenhams maintained its interim dividend per share at 1.0p and said that it was on track to achieve its full-year expectations.
“I am pleased with the good progress we have made against the strategic priorities we set out last year,” the company’s chief executive Michael Sharp said in the statement, adding that the continued refocusing of Debenhams promotional strategy had “delivered a strong increase in full price sales, an improvement in value perception and enabled us to end the half with an improved stock position”.
The Financial Times today quoted analysts at Stifel as saying that the results were ‘solid’ and showed strategic progress. Others industry experts, however, have been less upbeat.
“We remain concerned that the department stores are capital-intensive and need to be furbished to a higher standard to attract shoppers,” retail analyst Freddie George from Cantor Fitzgerald warned, as quoted by the BBC. “We also believe there is a growing cost to the business from growing its online operations.”