Discount retailer Pepco’s sales growth slows

Discount retailer Pepco’s sales growth slows

LONDON (Reuters) -European discount retailer Pepco Group reported a slowdown in underlying sales growth in its latest quarter on Thursday, saying it faced a challenging trading environment in April and May, particularly in Central Europe.

The Warsaw-listed group, which owns the Pepco, Poundland and Dealz brands, did, however, maintain its financial guidance for the full 2022-23 year.

It said like-for-like sales rose 2.6% in its third quarter to June 30, after rising 8.5% in the second quarter.

Like-for-like sales in the Pepco branded business fell 1.2% in the third quarter overall, but trading had recovered in recent weeks with a positive like-for-like performance in June and the start to the fourth quarter.

Third quarter like-for-like sales in the Poundland Group – Poundland and Dealz – rose 9.0% due a strengthening performance in fast moving consumer goods.

Total group revenue increased 12.5% on a constant currency basis to 1.37 billion euros ($1.53 billion), boosted by 159 new store openings.

The group said it expected to report full year core earnings (EBITDA) growth in the “mid-teens” on a constant currency basis, assuming no further significant deterioration in the trading environment.

($1 = 0.8978 euros)

(Reporting by James Davey; Editing by Tom Hogue and Rashmi Aich)