Debenhams surges as Christmas sales beat expectations

Shares in Debenhams surged on Tuesday after the retailer reported solid Christmas trading, beating analysts’ expectations.

For the 19 weeks to 9 January, like-for-like sales were up 1.9%, comfortably beating expectations for a 0.1% drop and better than last year’s 0.8% decline.

Group transaction value rose by 2.5% and online sales were up 12.1%. Debenhams said the growth in Online reflects increasing customer confidence in its service as well as later cut-off times and more competitive premium delivery charges.

Chief executive Michael Sharp said: “We have traded well in the first 19 weeks of the financial year with a strong performance over peak resulting in a record Christmas. This performance is evidence that our strategy is working with our customers finding our mix of products and brands both compelling and great value for money.

“The further improvements to our service proposition and our online presentation have delivered strong multi-channel sales growth, building on the progress we saw last year.”

The company said further progress on its strategic priorities supported its performance, delivering "a good Black Friday" and full price sales growth across the period of 5%.

International sales in the period grew in line with expectations, with Magasin du Nord continuing to deliver good growth and record Christmas trading helped by a recovering Danish economy.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: ““The update offers firm reassurance. A marked improvement in autumn sales has been made, with Christmas sales broadly in line with last year.

“On balance, the departing chief executive may today allow himself a pat on the back. The group’s strategic direction appears to be generating progress, with its reported performance contrasting with that at both Next and M&S.”

At 0843 GMT, Debenhams shares were up 15.2% to 76p.