Debenhams Group has bounced back to growth over the past quarter as its major turnaround plan starts to reap rewards.
Shares in the company, which also owns Boohoo and Pretty Little Thing, shot around 25% higher in early trading.
The company, which was renamed from Boohoo Group last year, has seen sales decline in recent years amid pressure on consumer finances and intense competition from rivals including Shein and Temu.
As a result, bosses have pushed ahead with a turnaround programme which has cut costs in order to boost profits.
On Wednesday, Debenhams revealed that gross merchandise value, the company’s measure for sales, rose by 0.5% over the quarter to May 31, compared with a year earlier.
It represented a recovery following a 5% decline in the three months to February.
Debenhams said it saw particularly strong growth in May, at 8%, boosted by strong trading across its Pretty Little Thing and Debenhams brands.
The retailer said the recent “strong momentum” means it is confident of delivering double-digit earnings growth for the past year.
It added that the group is on track to remove £100 million of costs by next year amid efforts to improve profits.
Dan Finley, group chief executive, said: “This is the result of the heavy lifting of our multi-year turnaround: the move to an asset light marketplace model, the warehouse consolidation, the cost reset, and the rebuild of every brand on a single proprietary platform.
“That work is now translating into materially improved profitability, with adjusted Ebitda (earnings before interest, tax, depreciation and amortisation) margin expanding and a substantial increase in adjusted Ebitda in the period, alongside significantly improved cashflows.”
Elsewhere in fashion, Zara owner Inditex shrugged off concerns linked to the Iran war to deliver stronger sales.
The Spanish retail giant said sales grew by 5.8% to 8.7 billion euros (£7.5 billion) over the first quarter of 2026, amid positive demand for its spring/summer collection.
Meanwhile, earnings grew by 7.3% to 2.6 billion euros (£2.2 billion) for the period.
