Debenhams wary on outlook as profits fall

Department store Debenhams met forecasts with a 2.7 per cent fall in year profit that reflected volatile weather conditions, and said it was wary about the outlook for consumer spending.

“Whilst consumer confidence may be showing signs of improvement, we expect that household incomes will remain under pressure from inflation growing ahead of wages,” said chief executive Michael Sharp.

The 200-year-old group, which trades out of 236 stores across 28 countries, said today it made a pretax profit of £154 million in the year to August 31st.

That was in line with analyst expectations but down from the £158.3 million made in the 2011-12 year.

Analyst forecasts had been cut after a profit warning in March that was blamed on January snow. The firm then endured unhelpful spring weather before getting a boost to sales from a summer heatwave.

Full-year sales, announced last month, rose 2.5 per cent to £2.78 billion, with sales at stores open over a year up 2.0 per cent and gross margin flat. (Reuters)