Discount Retail Chain Pepco Group (Warsaw stock exchange listed and Steinhoff International owned), operator of European discount retailer brands Pepco, Poundland and Dealz, said the demand for its products remains strong even against the backdrop of macro-economic uncertainty. The group, which listed on the Warsaw stock market last year, forecast underlying core earnings (EBITDA) on a constant currency basis, for full year ended September 30, to come in the range of €735 million (US$ 726m) to €750 million (US$ 741m), in line with its growth expectations. “We will continue to drive our business using our four key strategic levers, bigger, better, simpler and cheaper," commented Trevor Masters, Pepco Group CEO. "This strategy is driving faster growth through accelerated store openings and innovation to improve each store for customers and colleagues, helping to further enhance our LFL performance."
It said group revenue rose 17.4% on a constant currency basis to €4.82 billion (US$ 4.76bn), partly driven by 516 new stores. Like-for-like sales rose 5.2% and were up 15.5% in September, providing a strong exit rate into the new financial year.
Central And Eastern Europe
Pepco said in its core markets of Poland, Hungary and Romania inflation in clothing and footwear was running at only around a third of the headline inflation rate. Both clothing and food remain resilient categories in the Polish and wider Central and Eastern Europe retail sector, the company said, adding that the outlook across the UK remains 'challenging' as constraints on consumers' disposable income persist. 'That said, our value-led proposition becomes even more relevant in these challenging times and continues to drive new customers to our stores, expanding our target market, across Europe,' it added. The group has made efforts to lower its cost structure, as well as improve back-office structure and processes, a strategic focus that has "served us well in growing sales and delivering on EBITDA and cash generation," Masters added. "We are accelerating our strategy in order to capitalise on the opportunities available to us in these volatile market conditions."