Shares in Debenhams (DEBS) gained 5% to 25p after the online fashion and beauty platform upgraded its FY26 profit guidance. The firm also said it would retain PLT (Pretty Little Thing) following an improvement in the brand’s performance.
| Share price: 25p (+5%) | PE: n/a |
| Market cap: £330m | Yield: n/a |
Having rebranded from Boohoo last year, Debenhams is undergoing an eye-catching turnaround under CEO Dan Finley. This is helping fight off unwelcome attention from retail billionaire Mike Ashley, whose Frasers (FRAS) empire is a major shareholder.
Ahead of expectations
With trading ahead of expectations, suggesting a decent festive showing, Debenhams now expects adjusted EBITDA of £50 million for FY26. That marks an upgrade from previous guidance for around £45 million and is above the £41.6 million reported in FY25.
The online fashion, home and beauty platform, includes the Debenhams, Karen Millen, boohoo and PLT brands. Finley made a point of calling out the ‘continued momentum in our Debenhams brand’.
Debenhams also attributed the earnings beat to ‘a discernible improvement in our Youth Brands and accelerated progress on our transformation plan’.
Picking up pace
Debenhams stressed that all its brands continue to trade profitably. While the company is still looking to offload non-core assets to reduce its debt pile, it has decided to keep PLT.
‘Given the success with the turnaround, the momentum it is building and the substantial opportunity ahead as a fashion-led marketplace, the brand will be retained,’ explained Debenhams. ‘As a result, PLT will be reported in the current year in Debenhams’ continuing operations.’
Analysts at Panmure Liberum said Debenhams’ ‘earnings momentum is nicely positive’ and that PLT is now set to be ‘a centre piece of the fashion marketplace model’.
Debenhams’ board has been in a long-running fight with Ashley over the direction of the group. The mercurial retail magnate pursued control of the struggling Debenhams department store for years, offering rescue packages but facing rebuffs from the board.
The saga culminated in Debenhams entering administration in 2019, wiping out Ashley’s significant stake. Fraser’s efforts involved trying to force a merger with other retail holdings like House of Fraser, making bold takeover bids, and eventually launching legal action after Debenhams’ collapse, with the brand later acquired by Boohoo.
While today’s update was light on detail, it implies the online retailer delivered a respectable Christmas performance. With costs reduced and debt coming down, the company’s turnaround continues apace.
We will continue to monitor the performance of the fast-growing Debenhams brand, bought from administration some five years ago, with much interest.
Read the press release here: https://www.debenhamsgroup.com/investors/regulatory-news/
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