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Debenhams has forecast an adjusted EBITDA of £53m for its full-year results, marking a 36% increase year-on-year, while “comfortably ahead” of its previous guidance, as its multi-year turnaround strategy continues.
The group attributed this growth to a 76% rise in EBITDA in the second half of the year, while all brands “continued to trade profitably” over the year ended 28 February 2026.
It comes as the group continued to move towards an “increasingly asset-lite” model, largely driven by the Debenhams brand, which has seen the group reduced its net debt to £90m by the end of February, also supported by a £40m fundraise.
Fixed costs were also reduced to £119m over the year, down from £175m the prior year, with the group on track to reach a cost target of £100m by 2027.
Meanwhile, lease costs reached £18m over the year but are expected to fall to £13m following the exit of vacant properties.
Looking ahead, depreciation in FY27 is expected to fall from around £59m to £20m, reflecting the lower asset base post write offs relating to its turnaround plan. These include the consolidation of the DC operations and the technology platforms.
In light of these changes, the Debenhams board said it remains “confident” of double-digit adjusted EBITDA growth in FY27, particularly as the final quarter of 2026 continued to see improvements in its GMV trend, delivering three consecutive quarters of GMV decline improvement.
In its latest update, the company said that “as a result of this simplification of the group’s business, the continued focus on improving and growing the asset-lite marketplace model, getting our brands back to growth and the resulting impact of significantly improving the group’s cash generation, the directors remain confident in the outlook for FY27”.
Dan Finley, group CEO, said: “Our multi-year turnaround strategy continues at pace. We are pleased with the 76% increase in H2 Adjusted EBITDA and £53m full year Adjusted EBITDA. Our pivot to the stock-lite, capital-lite, highly profitable marketplace is working.
“The cost base has been reset, the warehouse consolidation completed, the tech re-platform delivered, the stock base rightsized, most of the onerous costs exited and the brand management teams strengthened. This is significant progress, ahead of our plan, but there is still more to be delivered and we now focus on growth.”
