Pepco Group grapples with ongoing supply chain issues, yet remains optimistic about future growth.
- Supply chain disruptions have impacted Pepco’s fourth-quarter like-for-like sales, prompting concerns.
- Despite setbacks, overall revenue increased by 10% due to new store openings, reflecting robust expansion plans.
- Militant attacks in the Red Sea continue to disrupt shipping routes, complicating stock availability.
- Pepco anticipates record revenue and EBITDA growth, driven by strategic expansions and gross margin improvements.
Pepco Group is currently navigating significant supply chain disruptions that have led to a year-on-year decrease in fourth-quarter like-for-like sales. These disruptions are primarily due to militant activities in the Red Sea, impeding the shipping routes through the Suez Canal. This has resulted in inconsistent stock availability in Pepco and Dealz stores.
Despite these challenges, the group has achieved a notable 10% increase in total revenue for the 51 weeks ending September 22, 2024. This growth is attributable to an aggressive store expansion strategy, with the opening of 64 new stores in the fourth quarter alone.
The ongoing disruptions have not deterred Pepco’s optimism for the financial year, as they forecast an underlying EBITDA of at least €900m (£787m), marking a 20% increase from the previous year. The company expects sales to exceed €6bn (£5.3bn), fuelled by strategic expansions and a focus on enhancing the core customer proposition.
Andy Bond, the executive chair of Pepco Group, expressed satisfaction with the progress made, especially in rebuilding profitability in Central and Eastern Europe. Bond stated, “I am pleased with the positive progress we have made this year, particularly in rebuilding profitability in our core Pepco business.”
The company remains committed to strengthening its price leadership and advancing its supply chain capabilities further. While there are challenges in like-for-like sales, the group aims to mitigate these through strategic planning and continuous improvements in gross margin year-on-year.
Pepco remains steadfast in its expansion efforts despite ongoing supply chain disruptions, projecting record financial results for the year.
