Pepco raises guidance after Dealz Poland sale
Pepco Group's Financial Performance and Strategic Moves
Third Quarter Trading Update
July 9 (Reuters) - European discount retailer Pepco Group raised its full-year guidance on Thursday after reporting stronger underlying trading in the third quarter, driven by a strong performance in Western Europe.
Sales Growth Excluding Dealz Poland
Third-quarter like-for-like sales rose 5.4%, excluding Dealz and fast-moving consumer goods following the disposal of the Polish business.
Full-Year Outlook
The retailer now expects a gross margin of around 51% and mid-teens underlying EBITDA growth for the full year 2026.
Strategic Reset and Business Disposals
Sale of Dealz Poland
The update is the first since Pepco agreed in June to sell its Dealz Poland business to Modella Capital for a nominal price, completing its exit from fast-moving consumer goods and a strategic reset that saw it sell the struggling Poundland chain in 2025.
Future Proceeds Agreement
Pepco will receive 35% of the net cash proceeds from any future sale of Dealz by Modella under the agreement.
Expansion in Western Europe
Drivers of Growth
The third quarter's like-for-like growth was driven by a 15% jump in Western Europe.
Expansion Plans
Pepco said in May it would accelerate its expansion in Western Europe, aiming to double its presence there by 2030 to capitalize on demand from value-seeking shoppers.
Additional Information
($1 = 0.8750 euros)
(Reporting by Alicja Surdy; Editing by Kate Mayberry and Matt Scuffham)
