Pepco Group reports positive momentum in half-year trading update

Luxembourg-based variety discount retailer Pepco Group has announced a pre-close trading update for the first six months of its 2026 financial year. The group reported continued growth in revenue and gross margin, bolstered by a strong performance in its largest market, Poland, and double-digit growth in Western Europe.

The company, which operates the Pepco and Dealz brands, saw group revenue rise by 3.7 percent on a constant currency basis for the 25 weeks to March 22, 2026. On a like-for-like (LFL) basis, group revenues increased by 3.1 percent excluding fast moving consumer goods (FMCG).

Strategic progress and regional expansion

Pepco Group chief executive officer, Stephan Borchert, noted that the results reflect the effectiveness of the group’s value proposition and pricing discipline. Borchert stated: “Pepco delivered its fifth consecutive quarter of like-for-like revenue growth, a testament to the strategic progress we are making.”

The Pepco brand specifically saw LFL revenue growth of 4.2 percent excluding FMCG year-to-date. This performance accelerated in recent weeks, reaching 9.6 percent growth over the last four weeks, driven by consumer demand for spring/summer 2026 (SS26) and Easter collections.

The group remains committed to its expansion strategy, having opened 31 net new stores during the first half of the financial year. By the end of February 2026, Pepco operated 4,046 stores. The retailer plans to enter North Macedonia in June, which will bring its presence to 19 countries. Total net openings for the 2026 financial year (FY26) are projected to reach approximately 250 stores.

While the Pepco brand showed strength, the Dealz business experienced a decline, with LFL revenues falling by 9.8 percent. The group confirmed that the process of divesting Dealz is progressing and is on track for completion within the current financial year. In Germany, store closures related to strategic restructuring impacted the net store opening figures for the period.

Financial outlook

Financially, the group is set to complete its 200 million euros share buyback programme this financial year. A fourth tranche of 52.90 million euros commenced on March 10, 2026.

Looking ahead, Pepco Group expects to report a strong profit performance for the first half of the year. Full-year guidance remains unchanged, with reported revenue growth projected between 6 percent and 8 percent. Underlying EBITDA is expected to grow by at least 9 percent year-over-year, while underlying net earnings growth is anticipated to exceed 25 percent, aided by lower interest costs following recent debt refinancing.

The group will publish its full H1 FY26 interim results on May 21, 2026.