Department store group Debenhams has confounded harsh high street conditions and expects full year profits to meet expectations.

Directors of the 169-store retailer were “particularly pleased” with sales trends in the past two months.

Debenhams posted like-for-like sales growth, excluding VAT, of 1.5% in the second half to date, resulting in a decline of 0.4% in the 43 weeks to June 25. Gross transaction value was up 2.9% and 3.1% respectively.

Chief executive Rob Templeman said Debenhams had managed pressures such as rising costs by realigning its range architecture and that cash margin was the priority. The retailer invested some gross margin in driving sales but gross margin for the year will be “broadly neutral”.

Multichannel operations performed strongly. Online, in-store ordering and mobile sales climbed 77%. The retailer’s iPhone app generated sales of £1m and has been downloaded 500,000 times. There has also been “good growth” in downloads of Nokia and Android apps.

Self-help customer order points are being installed in all shops “and are particularly beneficial in smaller stores through augmenting the range,” the retailer said.

Templeman said: “We are continuing to make progress despite significant headwinds in the sector and are pleased with the performance of the business in the year so far. 

“We remain cautious about the consumer environment and will continue to focus on growing cash margin through our self-help strategy of investing in our store portfolio, developing a seamless multichannel business and managing our supply chain effectively.”