Executive Summary

• UK-based department store chain Debenhams reported gross transaction value sales of £1,677 million for 1H17, up 2.9% year over year, but below the consensus estimate of £1,681 million.
• The company’s 1H17 statutory revenues came in at £1,351 million, up 1.8% year over year for the 26 weeks ended March 4, 2017. Group comparable store sales increased by 0.1% year over year on a constant currency basis. UK reported revenues were down0.3% and UK comparable store sales declined by 1.3%.
• The company’s gross margin contracted by 30basis points in 1H17, to 14.2%, and underlying EPS decreased by 6.5% year over year.
• For FY17, the company lowered its gross margin guidance to (25) basis points from (25)–25 basis points previously and raised its total cost increase forecast to 3%–4% from 2%–4% previously. The company did not provide sales guidance.