The rebranded ‘New Pepco Group’, fresh from the June sale of Poundland, has reported record revenues for the third quarter as it commenced a €50m (£43.1m) share buyback.
In the third quarter, the group reported a 2.6% growth in revenues across both its Pepco and Dealz brands. Pepco like-for-likes in the period were up 2.4% – the brand’s third consecutive quarter of growth.
Dealz reported a strong quarter, with like-for-like sales up by 5.8% driven by strong consumer demand in food and general merchandise.
The retailer reported that its gross margins improved by 180 basis points in the period year on year.
It also opened new 45 new Pepco and Dealz stores in the third quarter, driven predominantly by Pepco openings in the Central and Eastern Europe region. At the end of the period, the group operated 4,276 stores across its estate.
Off the back of the trading update, Pepco’s board announced that it would commence an initial share buyback of €50m (£43.1m).
Pepco group chief executive Stephan Borchert said: “Our results in Q3 reflect our continued strategic execution across ‘New Pepco Group’ and actions we have taken to drive more consistent performance. The Pepco brand delivered a strong performance in the third quarter, registering record revenue of over €1bn, a third consecutive quarter of like-for-like sales growth and a further uplift in gross margin.
“This outstanding performance at Pepco – the engine of the Group’s earnings potential – was driven by improved availability, a focus on price leadership of its best-selling items and improved product ranges, which supported our continuous improvement of LFL sales and volume growth in the period. Dealz also reported a strong quarter, with LFL sales increasing by 5.8%, with positive demand in food and general merchandise.
“Our transformation and value creation programme is making good progress, and we are thankful that our customers are rewarding our efforts with increasing loyalty.
“The Group’s continued momentum, its compelling underlying earnings potential, strong cash generation and the Board’s belief that the current share price materially undervalues its future prospects underpins today’s decision to commence a share buyback programme of up to €50m, to further enhance shareholder returns.
“Having completed the sale of Poundland in June 2025, New Pepco Group now has a simpler structure and we look forward with confidence to capitalising on the numerous growth opportunities for the Pepco brand, as part of our ambition to become one of Europe’s most successful discount retailers.”
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