While several brokers trimmed their full-year profit forecasts to around pounds 135m, the City was encouraged by the margin improvement and comments by finance director Matthew Roberts that Debenhams is gaining market share.Costs have been kept down and discounting has also been reducing, which is no mean feat in the face of frantic price reductions by troubled M&S.
Debenhams had a look atStorehouse, the ailing Bhs chain but last month said it was not considering a bid. Growth instead will come from store openings, though the City will be looking for evidence of organic sales growth to put more momentum behind the shares. The stock has lost more than 20 per cent of its value since April. Down 9p to 394p yesterday, the shares trade on a forward multiple of 16. A shift to higher-margin, own-bought sales as opposed to concessions will provide downside protection. A decent bet in a difficult sector, though M&S remains a loose cannon.