Pepco, the operator of pan-European value stores, has recently released its impressive first-half financial results. The company experienced a 7.3% increase in core earnings, reaching €347 million in underlying EBITDA, and a profit before tax of €144 million. Furthermore, Pepco saw its revenue surge by 18.9% to €2.3 billion, largely driven by the successful launch of 192 new stores. This expansion brought the total number of Pepco locations to nearly 3,700 across 17 countries.

While Pepco’s like-for-like sales growth registered a solid 5.3% increase, it was the second quarter that truly stood out with an exceptional 12.1% surge. The opening of 235 additional stores, including large megastores featuring an enhanced budget fashion offering called Pep&Co, contributed significantly to the company’s performance. Notably, Italy proved to be a particularly fruitful market, as the introduction of new stores nearly doubled Pepco’s presence and resulted in larger average basket sizes compared to its more established Central/East Europe markets. Encouraged by this success, Pepco is now confident in expanding further into Western European countries. Already, the company has opened its first Spanish store, which now boasts 40 locations performing beyond expectations. Additionally, Pepco launched its inaugural store in Germany in April of this year, with early trading proving to be positive.

Despite the challenges presented by the COVID-19 pandemic, Pepco has demonstrated resilience and is on track to meet its full-year guidance. The company’s strong performance, driven primarily by the Pepco chain, has continued into the third quarter since restrictions were eased in its key operating territories. Positive Easter sales, effective promotional campaigns, and a return of customers to physical stores have all played a role in Pepco’s ongoing success. Crucially, the company’s same-store performance has surpassed pre-pandemic levels, with average weekly sales at the Pepco chain up by 13.7% and at Poundland up by 4.3% compared to pre-COVID levels.

Recognizing the impact of the cost of living crisis on consumer behavior, Pepco has responded by minimizing price increases while managing inflation within its supply chain. This has led to a slight decrease in gross margins, but the company has implemented operational efficiencies to partially offset these effects. Overall, Pepco’s robust performance in the first half of the year, coupled with its ability to adapt to changing market conditions, places it in a favorable position for continued success in the future.

For more information on Pepco’s recent results, please visit:
Pepco Investors

To explore Pepco’s expansion plans and store openings, visit:
Pepco New Store Experience