Pepco Group (PCO) Q1 2025 TU earnings summary

Executive summary

• Q1 FY25 group revenue reached €1.9 billion, up 3% year-over-year at constant currency, with mixed brand performance.

• Like-for-like (LFL) revenue declined 1.1%, as Pepco and Dealz growth was offset by Poundland's ongoing challenges.

• The group surpassed 5,000 stores, opening 63 net new stores, mainly in the CEE region.

Financial highlights

• Pepco segment revenue grew 8.4% year-over-year, with LFL up 1.4% and improved gross margin.

• Poundland revenue declined 9.3% year-over-year, with LFL down 7.3% and gross margin contraction.

• Dealz revenue rose 16.2% year-over-year, with LFL up 6.6% and strong demand in food and general merchandise.

• Group gross margin improved by over 140 basis points year-over-year, driven by Pepco's performance.

Outlook and guidance

• Pepco and Dealz expected to continue profitable growth, supported by operational improvements and strong gross margin.

• Poundland's negative sales performance anticipated to moderate as the year progresses, with no net new store openings planned.

• Comprehensive assessment underway to recover Poundland's trading and cost structure.

• Strategic update scheduled for Capital Markets Day on 6 March 2025.