Debenhams shares have edged lower despite a better than expected trading update which led the retailer to say it would meet market expectations for the year.
Like for like sales for the 10 weeks to the beginning of September rose 3.7%, compared to forecasts of up to 2% growth. Poor summer weather, the current tough consumer climate and the distractions of the Olympics have all hit other retailers with Next, down 13p to £33.88, last week warning that its sales in August and September had been disappointing.
Debenhams chief executive Michael Sharp said:
We do not anticipate a significant change in the economic environment in the near future but we expect to continue to make progress in 2013.
Debenhams has dipped 0.45p to 99p but Bethany Hocking at Investec was positive on the figures, saying:
What this statement does demonstrate is that Debenhams is outperforming in a tough market, evidenced by the 20 basis points market share gain in womenswear. Our conviction in our buy recommendation is increased, with the current sector discount unwarranted, in our view.
Analyst Nick Bubb said:
The fact that Debenhams has said that full-year pretax profit will be only "in line" with market expectations, despite the sales beat over the last 10 weeks implies that there is something not quite right, but this may be an operating cost/revenue investment issue. So, pending more news with the finals on 25 October, we must doff our hats to the much maligned management of Debenhams.
