Q1 FY27 Trading Update
Summary by AI BETAClose X
3 June 2026
boohoo group plc
("Debenhams Group", the "Group" or the "Company")
Trading update for the 1st quarter to May 2026
Debenhams Group Back to Growth
Q1 FY27 Trading Update
Momentum in the Debenhams Group multi-year turnaround accelerated in the Group's first quarter ended 31 May 2026 ("Q1"). The Board is pleased to report that the Company has returned to growth, with Group GMV up 0.5% year on year. May trading was particularly strong with GMV growth of approximately 8%. Performance was most notable across the Debenhams brand and PrettyLittleThing, with improvements also achieved in Boohoo, BoohooMan and Karen Millen.
The return to growth has been supported by materially improved profitability and significantly improved cashflows.
Gross margin expanded to 53.5% in the period from 52.1% in the prior year, and the Group's returns rate declined by c.5% in the quarter.
Adjusted EBITDA margin expanded materially year on year, delivering a substantial increase in Adjusted EBITDA in the period.
Exceptional costs reduced sharply by 72% in Q1, while capital expenditure fell by 54% year on year, keeping the Group firmly on track towards free cash flow generation.
Outlook
Whilst early in the current financial year, the strong momentum achieved in Q1 underpins the Board's confidence in delivering double-digit percentage growth in full year Adjusted EBITDA from the £53m guided for FY26 in March.
Similarly, the reduction of net debt to adjusted EBITDA to below 1x in the current year is on track. This will be delivered through trading cashflow and disposals, including the Burnley property and the US warehouse, both of which are planned to be disposed of in the current year.
Significant cost has been removed from the business and fixed costs are on track to reduce to £100m through 2027. This a c.£200m cumulative reduction delivered by the new management team since their appointment.
The transition to an asset light model is progressing well. All brands have now transitioned to the marketplace model and c.25k brands / partners have now joined the Group ecosystem.
Capex will be 50% lower year on year in the current year. It has been reduced from £27.5m FY25 to £16m FY26 and is expected to fall to £8m in the current year.
Lease costs in the current year will reduce to £13m and will reduce further to £6m when the US vacant property lease has been exited.
The £6m ongoing lease costs will include the fully automated Sheffield warehouse, the Manchester head office, as well as a small London footprint.
Interest costs and exceptional items are also expected to fall materially in the current year.
The Board is confident it will deliver double digit Adjusted EBITDA growth and free cash flow in FY27.
Full year results for the period ended 28 February 2026 will be released within the next two weeks.
Dan Finley, Group CEO, commented:
"Debenhams Group has returned to growth, and Q1 marks the inflection point we have been working towards. Group GMV grew 0.5% year on year - with May trading particularly strong at around 8%, led by the Debenhams brand and PrettyLittleThing.
"This is the result of the heavy lifting of our multi-year turnaround: the move to an asset light marketplace model, the warehouse consolidation, the cost reset, and the rebuild of every brand on a single proprietary platform. That work is now translating into materially improved profitability, with Adjusted EBITDA margin expanding and a substantial increase in Adjusted EBITDA in the period, alongside significantly improved cashflows.
"With the cost out ahead of plan and strong momentum carried into the year, the Board's confidence has grown and we are reiterating our guidance of double-digit Adjusted EBITDA growth in FY27."
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Enquiries |
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Debenhams Group |
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Phil Ellis, Chief Financial Officer |
Tel: +44 (0)161 233 2050 |
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Zeus - Nominated Adviser and Joint Broker |
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Dan Bate / James Edis / Emma Burn |
Tel: +44 (0)161 831 1512 |
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Nick Searle / Dominic King |
Tel: +44 (0)20 3829 5000 |
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Panmure Liberum - Joint Broker |
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Mark Dickenson / James Sinclair-Ford / Ailsa MacMaster |
Tel: +44 (0)20 3100 2000 |
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Sodali & Co - Financial PR Adviser |
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Ben Foster / Louisa Henry |
Tel: +44 (0)20 3984 0114 |
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About Debenhams Group
Debenhams Group is an online platform, for fashion, home, and beauty, serving millions of customers across five shopping destinations: Debenhams, Karen Millen, boohoo, MAN and PLT. Debenhams Group dates back to 1778 when William Clark, a retail pioneer of the time, opened the UK's first department store. Today, the Group is home to Debenhams, Britain's online department store and leading fashion-led marketplaces, boohoo, PLT, MAN, and Karen Millen.
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