Pepco’s preliminary results for FY25 showed the European value retail giant turning in a “strong financial performance” as it said “significant strategic execution delivers [a] transformational year”.
Pepco
The results, for the 12 months to the end of September, showed revenue rising 8.7% to €4.5 billion. Like for like (LFL) revenue growth was 2.6% after a 3% fall in the previous year. The gross profit margin rose to 48% from 47% and underlying EBITDA on an IFRS 16 basis was up 10.3% at €865 million. On a pre-IFRS 16 basis it was up 10.6% at €531 million. Underlying profit after tax rose 19.7% to €219 million.
All that came as the sale of Poundland was successfully completed in June 2025, “significantly simplifying the group structure”.
Pepco’s FMCG exit was also completed including the conversion of most Pepco plus stores in Iberia, “generating encouraging results”.
The company also saw an improved performance in Poland and Western Europe in general and the acceleration of its digital journey with a new website, app and loyalty scheme ready for launch in Q1 FY26.
It also said that the Dealz chain is now fully independent and the divestment process is intended to start next year as it explores strategic options for the business.
The big event during the year was the aforementioned sale of Poundland, the UK operation that had been a drain on the wider business in recent periods. With that now divested, it’s clear that the company is able to move forward and it confirmed that FY26 underlying EBITDA is expected to grow at least 9%.
That view is boosted by current trading. In the first financial quarter-to-date (1 October to 13 December 2025), Pepco LFL revenues have risen 3.9% excluding FMCG (LFL of +0.3% including FMCG).
It saw a solid start to the quarter in October but this was partially offset by a weaker November in line with the broader market, before returning to growth in December.
Dealz, as mentioned, is next to be divested but for now it’s dragging down the overall company performance, Pepco saying that this reflects “challenging trading conditions across all categories, particularly in health and beauty”.
Commenting on the results overall, CEO Stephan Borchert said: “2025 was a real turning point… the group has executed at exceptional pace, delivering significant progress in a short timeframe. The decision to refocus on Pepco and exclusively on our core categories of clothing and general merchandise has been validated by these strong results, in particular our gross margin and free cash performance, which were both ahead of expectations.
“We opened 247 net new stores with strengthened store economics and returns on capital for Pepco across our geographies, as we progressed our disciplined opening plans in both Western Europe, and Central and Eastern Europe. The performance of Western Europe has become a clear growth engine, exceeding our initial expectations. It is clear this region is now prepared for future accelerated growth.
“The development of our digital capabilities is progressing as per plan, and we are on track for launch during calendar Q1 2026.”
