Pepco Group, the parent company of Pepco, Dealz, and Poundland, has announced an 11% increase in constant currency revenue growth for the first quarter (Q1) of fiscal 2024 (FY24), reaching a record €1.9bn ($2.0bn).
Despite this, during the quarter ending 31 December 2023, the company experienced a 2.3% decline in like-for-like (LFL) revenues.
LFL revenue of Pepco brand dropped 3.7% in Q1 FY24, compared to an exceptionally strong Q1 FY23 where LFL sales had surged by 20%.
Poundland brand reported a modest LFL growth of 0.9%, buoyed by a robust Christmas season, particularly in fast-moving consumer goods (FMCG) offset by a down trend clothing performance.
Affected by a reduction in stock availability in general merchandise categories in preparation for a shift to Pepco-sourced products, LFL of Dealz declined 4.6% against the prior year period.
Pepco Group’s gross margin is on the mend, with a notable 200 basis point improvement over the previous year, primarily driven by Pepco’s strong performance.
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The group’s store expansion strategy saw over 200 net new stores opened in the quarter, capitalising on the peak trading period.
Pepco inaugurated 127 new stores, while Dealz Poland continued its expansion with 26 new outlets..
This expansion also included stores converted from Wilko in the UK, contributing to Poundland’s 77 gross new store openings.
Pepco executive chair Andy Bond said: “The group delivered record revenue in its first quarter. Whilst the Pepco brand saw LFL revenues down across the quarter against a tough comparative period last year, it was encouraging to see the LFL trend improve over the three months in its core CEE markets. Poundland continued to perform robustly in Q1, boosted by strong sales of FMCG.
“Looking ahead, the group has a market-leading customer proposition, strict focus on returns, and proven profitable store model that makes the leadership team confident in delivering future success across our core European markets.”