Debenhams Group, the online fashion retailer formerly known as boohoo, has set its sights on delivering more than £100 million in annual profit before tax as its turnaround accelerates.
The medium-term target accompanied half-year results to 31 August 2026 that showed reported EBITDA surging more than 600% to £19.7 million, from a loss of £3.5 million a year earlier.
For the full year, the board expects GMV (gross merchandise value, the total value of goods sold) growth and adjusted EBITDA of no less than £59 million, representing double-digit growth year on year.
The group also expects net debt to be negligible by its February 2027 year-end, following post-period disposals of its Sheffield automation facility for £90 million and the Nasty Gal brand for $16 million (£11.9 million).
Chief executive Dan Finley said the pace of the turnaround was significantly ahead of original guidance and that he saw material opportunities ahead.
Statutory profit before tax was £28.3 million in the period, compared with a loss of £17.9 million a year earlier, marking the first positive figure since August 2021.
Investors should note, however, that the result includes a £40.6 million non-cash credit relating to the sublease of the group's US distribution centre.
Stripping that out, the loss before tax narrowed from around £52 million to approximately £12 million.
GMV before returns grew 1.8% to £863.8 million, accelerating from growth of 0.5% in the first quarter to 2.9% in the second.
The Debenhams brand was the standout performer, growing 14.1% to represent around 42% of group GMV, while PrettyLittleThing, boohoo and Karen Millen all returned to growth.
Marketplace sales reached a record 38.9% of GMV, against an ambition of well over 50%, helping lift gross margin by 220 basis points to 54.1%.
Free cash flow swung to an inflow of £5.6 million from an outflow of £22.1 million a year earlier.
Looking to FY28, the group expects depreciation to fall to £14 million from £22 million, lease costs to drop to £4 million from £14 million, and interest to reduce by at least £10 million.
