Poundland parent Pepco has reported a rise in second-quarter sales as it successfully steers its way through a “challenging environment”.
Pepco Group, which owns Dealz as well as Poundland and Pepco, reported total revenue of €1.18bn (£1.04bn) in the period to March 31.
Poundland’s like-for-like revenue was up 5.7% while Pepco reported a 10.7% increase, despite the retailer’s concerns over the “challenging environment” and a continued rise in inflation in central Europe where it has a big presence.
The retailer emphasised the importance of “offering the best possible value for money” to its customers and reported “strong demand” for chilled and frozen products as shoppers buy into frozen options to reduce food waste.
Pepco opened 166 net new stores during its first half and said it anticipates “an acceleration of openings” during the second half, in a bid to achieve its new store target of opening at least 550 net new stores this full financial year.
Poundland achieved a “record-breaking” first week of sales in its largest-ever store opening in Glasgow, which opened last month, resulting in the highest week-one clothing sales in its history.
The retailer maintained its full-year guidance and said it “remains confident on the outlook”.
Pepco Group chief executive Trevor Masters said: “Pepco has recorded an encouraging second-quarter trading performance against the backdrop of a continuing inflationary environment for both customers and the business.
“Demand for our products remains strong and double-digit like-for-like revenue growth demonstrates solid progress for the group. We have continued to deliver against our strategic priorities, including the successful store refit strategy and profitable store expansion programme – our biggest source of value creation.
“For the first time, the number of net new store openings in western Europe, including our 100th store in Italy, outweighed the number of openings in central Europe across the quarter. This is a strategically important milestone for the group and the continued positive consumer response to our proposition across those markets demonstrates that the whole of Europe is addressable to us.
“We will look to leverage this opportunity further over the rest of the year, and our plans to launch the Pepco brand in Portugal and Bosnia and Herzegovina in the second half of 2023 remain on track.
“While the consumer environment remains challenging due to inflationary pressures, our strategy of price leadership gives us continued conviction in our ability to win customers and market share, which we have grown in our key markets over the last quarter.
“We remain confident on meeting our guidance for full-year EBITDA, including our targets for the new store-opening programme.”
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