Poundland slashes guidance as H1 sales worsen

Pepco Group, the owner of Poundland, has slashed its full-year guidance for the discount chain as trading remained “challenging” in the first half of the year. 

Poundland is now expected to deliver underlying EBITDA of around €0m to €20m (£0 – £17m) in FY25, compared with previous guidance of €50m to €70m (£42m – £59m). 

Pepco said the downgrade follows “highly challenging trading conditions”, which were further impacted by clearance of old stock and issues with product availability.

Sales in the half-year to March 2025 also fell by 6.5% to €985m (£830.8m), with like-for-like revenues down by 7.3%. 

Overall, Pepco like-for-like sales fell by 0.7% during the period, with positive Pepco and Dealz trading offset by the continued challenges at Poundland

In light of this, Pepco said it is continuing to “actively explore separation options” for Poundland, with an exit expected by the end of FY25.

Earlier this week, it was reported that Poundland store closures are “likely” as Gordon Brothers, the former owner of Laura Ashley, has emerged as a frontrunner to take control of the group.

In March, Pepco confirmed that it was “actively exploring” a potential sale of Poundland amid rising pressures on the business, and instead plans to focus on the Pepco brand as a single future format.

The discount retail group said its “ultimate ambition” is to operate under a single Pepco format, which largely drives the group’s earnings, with a focus on its higher margin Pepco clothing and general merchandise ranges. 

Stephan Borchert, CEO, said: “At Poundland, trading remains challenging, which is reflected in a profit outturn below expectations for H1 and a weaker outlook for the full year. Barry Williams, who was re-appointed as Poundland managing director in March 2025, and his team are actively driving a recovery plan to help turn around the business by refocusing on its traditional core strengths. 

“We continue to undertake a process to separate Poundland from the Group, as part of a wider strategy shift away from FMCG, with a divesture expected before the end of FY25.”

He added: “Our core focus remains on Pepco as the single future format – and driving force – of the group. I am encouraged by Pepco’s performance so far in FY25, with a strong uplift in gross margin. 

“The business has delivered consistent LFL sales progress and this trading momentum has continued into Q3 to date. Our relentless efforts to strengthen our price leadership position and customer experience have driven a strong increase in transaction volumes.”