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The Works has reported that its losses narrowed in the first half of its 2025/26 financial year, supported by stronger in-store sales and improved margins, as online trading was hit by ongoing fulfilment problems.
For the 26 weeks to 2 November 2025, the specialist value retailer’s adjusted loss before tax narrowed to £5.1m from £6.5m in the same period last year, while it also posted a pre-IFRS 16 adjusted EBITDA loss of £1.0m, compared with a £2.8m loss a year earlier.
Total like-for-like sales increased 0.3%, with stores delivering growth of 4% on a like-for-like basis.
Physical stores account for more than 90% of the group’s sales and significantly outperformed the wider non-food retail market, which recorded growth of 0.6% over the period.
In contrast, online sales fell 36%, reflecting disruption following the transition to a new third-party fulfilment partner. Total group revenue slipped 0.3% year on year to £123.8m.
The Works said year-on-year profitability improvements were driven by higher store sales, product margin growth of 330 basis points and ongoing cost-saving measures, which helped offset inflationary and operational cost pressures.
Additionally, trading in the first 11 weeks of the second half, to 18 January 2026, was in line with board expectations.
Store like-for-like sales rose 1.2%, again outperforming the wider non-food retail market, which declined 0.4% over the same period. However, online sales continued to be constrained, with like-for-like sales down 51.8%.
The retailer stated that it delivered further margin improvements in the second half to date, with product margins up 200 basis points year on year, despite increased promotional activity around Black Friday and higher post-Christmas clearance.
Looking ahead, The Works remains on track to meet full-year market expectations, including pre-IFRS 16 adjusted EBITDA of £11.0m for FY26, and expects sales and profit growth in FY27.
Gavin Peck, chief executive of The Works, said: “The strategic initiatives delivered in the first half of the financial year have been critical in driving a strong performance in-store and an improvement in profitability year-on-year. Along with the wider sector, we have felt the impact of a challenging consumer backdrop, however we continued to see a positive response to our excellent value and new products over the festive period.
