Debenhams Group reports return to growth in Q1 2026

UK online retail group Boohoo Group plc, which operates as Debenhams Group, reported a return to growth for its first quarter ended May 31, 2026. The company experienced an acceleration in its multi-year turnaround momentum, with group gross merchandise value, or GMV, increasing by 0.5 percent year-over-year.

Trading during May was notably strong, achieving GMV growth of approximately 8 percent. This performance was primarily led by the Debenhams brand and PrettyLittleThing, alongside improvements within Boohoo, BoohooMan and Karen Millen.

“Debenhams Group has returned to growth, and Q1 marks the inflection point we have been working towards,” stated Debenhams Group chief executive officer Dan Finley. “Group GMV grew 0.5% year on year - with May trading particularly strong at around 8%, led by the Debenhams brand and PrettyLittleThing.”

Profitability and cost reductions underpin turnaround

Adjusted EBITDA margin expanded during the period, which resulted in a substantial increase in adjusted EBITDA.

The company is progressing with its transition to an asset-light operational model. All fashion brands under the group have transitioned to the marketplace model, with approximately 25,000 brands and partners now integrated into the ecosystem.

Outlook remains positive for fiscal year

The company expects lease costs for the current year to decline to 13 million pounds; these costs will further reduce to 6 million pounds once the vacant US property lease is exited. The remaining 6 million pounds in ongoing lease obligations will cover the fully automated Sheffield warehouse, the Manchester head office, and a small London footprint.

The board of directors expressed confidence in achieving double-digit percentage growth in full-year adjusted EBITDA from the 53 million pounds guided for fiscal year 2026 in March. Net debt to adjusted EBITDA is on track to fall below 1x in the current year, driven by trading cashflow and planned asset disposals. These divestments include the Burnley property and the US warehouse, both of which are scheduled for disposal in the current year.

Finley added that the financial turnaround was driven by warehouse consolidation, a comprehensive cost reset, and the rebuilding of every brand onto a single proprietary platform. The executive reiterated corporate guidance pointing toward double-digit adjusted EBITDA growth and free cash flow generation for fiscal year 2027.

Full-year financial results for the period ended February 28, 2026 are scheduled for release within the next two weeks.