A fledgling economic recovery is likely to take time to feed into stronger consumer spending, British department store group Debenhams said today, as a hot summer and online growth helped to lift its quarterly sales.
Shares in the 200-year-old firm, which trades from 236 stores across 28 countries including Ireland, rose as much as 4.4% toda.
The company said it was winning market share and would meet profit forecasts for its 2012-13 financial year.
Debenhams is modernising stores, including a £25m sterling refurbishment of its flagship on London's Oxford Street, investing in new product and online.
It is also expanding its brand internationally as it seeks to counter subdued consumer confidence with market share gains.
"Looking forward, we are confident in our strategy but are not expecting any rapid recovery in consumer sentiment and the marketplace remains highly competitive," said chief executive Michael Sharp.
Debenhams, which trails employee-owned John Lewis by annual sales, said sales at stores open over a year rose 1.9% in the 10 weeks to August 31, its fiscal fourth quarter, as it won share in categories including womenswear and beauty.
That was in line with analysts' forecasts, compared with a flat outcome in the 16 weeks to June 22, and took growth for the full financial year to 2%.
"The summer weather was undoubtedly helpful but we've grown market share which demonstrates that in a competitive market place the strategy is delivering," said Sharp, pointing to data from Kantar Worldpanel which showed Debenhams' share in clothing, footwear and accessories rising by 30 basis points in the 12 week period.
Online sales were up 46.2% over the year, well ahead of market growth of 14.4%, while revenue through mobile phones soared 128%. Analysts said the online growth partly reflected a catch up with rivals that moved much earlier to expand online, such as Next.
The company has forecast a flat gross profit margin for the full year, in line with guidance. Prior to the update analysts were on average forecasting a full-year pretax profit of about £153m, down from £158.3m in the 2011-12 year.
Forecasts had been cut after a profit warning in March that was blamed on January snow.