Debenhams PLC (LON:DEB) saw its shares drop 11% in early trading on Thursday as the department stores group warned on its full-year outlook for the second time in four months and chopped its dividend as it reported a 52% slump in first-half profit.
The small cap retailer, which issued a profit warning back in January, also said Matt Smith, its chief financial officer, was quitting the group to become finance chief of rival Selfridges.
READ: Debenhams to cut dividend after weak Christmas trading update, analysts predict
The firm revealed it made an underlying pre-tax profit of £42.2mln for the 26 weeks to March 3, down from £87.8mln a year earlier, and below analysts' average forecast of £44mln.
Debenhams first-half revenue fell by 1.6% to £1.65bn and its like-for-like (l-for-l) sales declined by 2.2% against “a challenging UK market background.”
The firm added that final trading week of the period was disrupted by extreme weather conditions, temporarily closing almost 100 stores during its New Season Spectacular sale, which it estimated to have reduced l-for-l’s by around 1.0% for the first-half.
The group cut its interim dividend by 51% to 0.5p.
Full-year guidance reduced
Debenhams said that based on its current view of the second half of the financial year, its full-year pre-tax profit was expected to be at the lower end of the current range of broker forecasts of £50mln-£61mln.
It had previously guided for full-year profits of £55mln-£65mln, having made and £95.2mln last year.
The struggling retailer is one year into a turnaround programme led by chief executive Sergio Bucher, with the former Amazon and Inditex executive closing some stores and revamping the rest, cutting promotions and improving its online service.
Around 8.50am, Debenhams shares were 6.6% lower at 21.78p.
Independent retail guru Nick Bubb commented: "The much-awaited Debenhams interims today (for the 26 weeks to March 3rd) are predictably poor and you can see why the weekend press was softened up with the news about the impact of the snow disruption at the very end of the period (not that Debenhams bothered to relay this at the time, via a pre-close update).
He added: "It is also predictable that all this is dressed up with more guff from the new CEO Sergio Bucher about the success and the acceleration of his “Debenhams Redesigned” strategy, but it is interesting that the CFO Matt Smith doesn’t want to hang about to see the results of this and is off to take the much easier job of being FD of Selfridges."
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