Department store group Debenhams has issued a profit warning for its first half after snow affected sales in January and margins took a tumble.
The retailer said it now expects profit for the first half to be around £120m. The consensus of City analysts was previously £130m.
Debenhams reported that the half had started strongly and group like-for-like sales rose 2.9% in the first 18 weeks and 3% in the 26 weeks to March 2. However, during the snow-affected period between January 14 and January 27, UK like-for-like sales slumped by around 10%.
To help recover the lost sales, Debenhams introduced additional promotions in February focused on Valentine’s Day, half-term and the month-end. However, they did not fully recover the sales lost in January.
The Sales undermined gross margin because of the lower margin on clearance lines.
The retailer said stock is now at planned levels and forecasts for the second half are in line with expectations.
Debenhams chief executive Michael Sharp said: “While the impact of the snow on the first half is disappointing, it is now behind us and sales volumes have recovered. We are confident in our spring/summer ranges and that we can grow sales in the second half.
“Our strategy to build a leading international, multichannel brand remains on track and we continue to focus on the four pillars of the strategy and investing in our business for long-term, sustainable growth.”