Debenhams Group, formerly boohoo group plc, has powered past guidance to deliver a notably stronger performance for FY26. The Group’s trading statement for the financial year ending 28 February 2026 shows £53m in adjusted EBITDA, an impressive 36% year‑on‑year increase -comfortably ahead of the guidance it upgraded as recently as January. The full‑year uplift was driven by an exceptional second half, where adjusted EBITDA surged 76%, showing the strong momentum behind the group’s multi‑year turnaround.
Once a high street stalwart, Debenhams has transformed into a stock-lite, capital-lite, highly profitable marketplace. Since the retailer’s last trading statement for 2025, which showed the marketplace in implementation mode, it is now operational, scaled, and delivering clear financial benefits.
CEO Dan Finley described the shift as “working,” noting that the business has reset its cost base, completed warehouse consolidation, delivered its tech replatform, rightsized stock levels and exited most onerous legacy costs — progress the board says is “ahead of plan.”
Cost base reset and cash generation set to strengthen
The group ended the year with a fixed cost exit rate of £119m, well below both the prior year’s £175m and the previously guided £130m. It remains on track to reach £100m in FY27.
Cash generation is expected to improve materially. Exceptional costs will fall sharply, lease costs are set to decline from £18m in FY26 to around £13m in FY27, and further to £6m once its vacant US property lease is exited. Capex has already dropped from £28m to c.£16m, and is projected to fall again to c.£8m in FY27 — a shift that further enhances free cash flow.
Depreciation, which sits at c.£59m for FY26, is forecast to drop to c.£20m next year, reflecting a leaner asset base following consolidation of distribution centres and the completion of the group’s tech transformation.
Debt down, outlook up
The group closed the year with net debt of £90m. Net debt is expected to fall to below 1× EBITDA by the end of FY27, driven by stronger operating cashflow, reduced lease liabilities, lower capex and further disposal activity.
The board stated that all brands across the group are trading profitably on an adjusted EBITDA basis, reinforcing confidence in the turnaround trajectory.
Gross merchandise value showed continued improvement, with three consecutive quarters of GMV decline reduction, exiting February at just 5% below last year — a marked improvement relative to previous periods.
Given these trends, the board has raised FY27 guidance and now expects double‑digit EBITDA growth on top of the higher FY26 outturn. With the marketplace model increasingly embedded and cash generation strengthening, directors remain confident in the retailer’s outlook for the year ahead.
Debenhams’ transformation from a classic high street department store to an agile online-only marketplace looks to be paying off. With many businesses struggling with the costs of physical retail, it remains to be seen whether other major names follow suit.
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