Poundland’s full-year profits will come in at the lower end of consensus after decreased high street footfall dampened its Christmas sales.
The value retailer predicted pre-tax profits would come it at around £42.6m – towards the bottom end of the published consensus of £39.8m to £45.8m - despite reporting a 29.4% jump in total sales during a “volatile” 13 weeks to December 27.
However, a large chunk of the growth was attributed to the acquisition of 99p Stores, which lifted revenues to £424.9m during the period.
Sales excluding its Spanish business grew 30.1% on a constant currency basis, but Poundland contributed just nine percentage points to that total, with three of those attributed to 99p Stores that have already been converted into the Poundland fascia.
The remaining 21.1 percentage points of sales growth was contributed by 99p Stores that continued to operate under the old fascia.
Poundland hailed its “strongest ever” Christmas and Halloween proposition, but said high street footfall “remained below last year”, which impacted sales growth.
The retailer said it remained “on track” to open around 70 net new Poundland and Dealz stores in the UK and Ireland for the full year.
Boss Jim McCarthy said the programme of converting 99p Stores will be “substantially complete” by April, when the retailer plans to report Poundland sales as a single entity. It will however highlight any non-converted 99p Stores.
McCarthy added: “The trading conditions that we experienced in November continued through the third quarter, with high street customer numbers down year on year and this has impacted sales growth.
“I am very encouraged by the sales uplifts of converted 99p Stores and by the speed and efficiency of the conversion process.”