Pepco Group’s fourth-quarter results reflect significant challenges and growth opportunities.
- The group’s like-for-like sales declined by 3.1% due to supply chain disruptions caused by geopolitical unrest.
- Despite this, overall revenue increased by 10%, supported by an aggressive store expansion strategy.
- Pepco projects a robust financial year with anticipated EBITDA growth of 20% year-on-year.
- The company remains optimistic, focusing on enhancing its supply chain capabilities.
Pepco Group has encountered substantial disruption to its supply chain, influencing its fourth-quarter performance. The company’s like-for-like sales experienced a decrement of 3.1%, largely attributed to ongoing impediments in shipping routes through the Suez Canal resulting from militant attacks in the Red Sea. These supply chain challenges have impeded consistent and timely stock availability across stores, directly impacting sales.
Despite these obstacles, Pepco has recorded a 10% rise in total revenue for the 51 weeks ending September 22, 2024. This growth has been bolstered by a vigorous store expansion strategy which saw the opening of 64 new stores in the fourth quarter alone. The group projects that it will conclude the year with a net increase of 390 stores, aligning with previous guidance.
Financially, Pepco remains optimistic, forecasting an underlying EBITDA of at least €900 million (£787 million) for the current fiscal year. This reflects a significant 20% improvement from the previous year, driven by enhancements in gross margins. The group anticipates surpassing €6 billion (£5.3 billion) in sales, underscoring its resilience amidst adversities.
Andy Bond, executive chair of Pepco Group, expressed satisfaction with the company’s trajectory, especially in rebuilding profitability within its core operations in Central and Eastern Europe. Bond remarked, “While there is much more to do, particularly around like-for-like sales progress, we remain committed to expanding our price leadership position, enhancing the core customer proposition and improving our supply chain capabilities.”
Pepco Group demonstrates resilience in the face of supply chain disruptions, leveraging strategic growth initiatives to maintain fiscal health.
