Pepco Group FY25 revenue expected to exceed 4.5 billion euros

Pepco Group N.V. has reported a pre-close trading update for the full fiscal year 2025, with results for the continuing Group (excluding Poundland) expected to be in line with prior guidance. The company anticipates revenues will exceed 4.5 billion euros, driven by continued momentum in like-for-like (LFL) revenues, which are up 2.7 percent for the 51 weeks to September 21.

Underlying EBITDA growth is expected to trend toward the top end of the high single-digit range, while underlying net earnings are projected to show significant year-on-year growth, already reaching 196 million euros in the first nine months—nearly matching the full-year 2024 total of 199 million euros.

Strategic and operational highlights

“Our business is reshaped and simplified, focused on our core Pepco brand in key regions across CEE and Western Europe. The Group is now more agile to take advantage of the opportunities ahead, drive higher customer satisfaction through digital engagement and ultimately increase market share," said the company's CEO Stephan Borchert in a statement.

The strong performance follows a "transformational year" of strategic execution, according to Borchert. Key milestones include the completion of the Poundland divestment to Gordon Brothers in June 2025 and the successful exit of Fast-Moving Consumer Goods (FMCG) from the Pepco brand. The removal of FMCG aligns with the strategy to focus on higher-margin clothing and general merchandise, where the Pepco banner saw overall LFL revenue growth of 6.1 percent in the second half excluding FMCG.

Trading in the fourth quarter has been particularly strong, with Pepco LFL revenue growing by 3.9 percent—the best quarterly performance in two and a half years. This recovery was led by a robust performance in Poland and 6.7 percent LFL growth in Western Europe through the year. The Group also confirmed it expects to meet its target of opening 248 net new stores this year.

The only notable operational softness was reported by the Dealz banner, which saw a 4.4 percent LFL decline in the fourth quarter due to intense promotional activity in health and beauty and unseasonably cold weather impacting soft drink sales.

Financial discipline and capital returns

Pepco Group is emphasising financial discipline and capital returns to shareholders. The Group has announced a second 50 million euros tranche of its share buyback program to commence in October 2025, following the completion of the first 50 million euros tranche in August. This buyback reflects the Board's conviction that the current share price "materially undervalues" the company's prospects.

Furthermore, the Group has initiated a debt optimisation plan, calling 175 million euros of its senior secured notes to extend its debt maturity profile. The company's liquidity remains strong, with total available liquidity exceeding 700 million euros