Debenhams profits meet expectations despite challenging retail environment

Debenhams has reported a rise in full-year profits despite reporting "tougher" trading conditions in the second half of the year.

Britain's second largest department store chain made £114.1m ($139.3m) in the year to 3 September period, in line with market expectations and a 0.5% increase on the previous 12 months.

Global like-for-like sales, which exclude new store openings, increased 0.7% from a year ago, but total revenue for the period declined 0.5% to £2.31bn.

Debenhams said its strategy to shift away from clothing had paid dividends, with strong growth in beauty, gifting and food.

The results come one week after former Amazon Fashion Europe vice president Sergio Bucher formally took over as chief executive of Debenhams.

"We have delivered profits in line with market expectations, reflecting a strong performance over peak followed by a tougher second half trading environment," Debenhams chairman Sir Ian Cheshire said in a statement.

"Our diversified business model together with good cash generation and reducing debt means that Debenhams is in good shape to withstand a market background that remains uncertain."

Debenhams reported a 9.3% increase in online sales, with strong growth in mobile.

Non-clothing items accounted for more than half of the retailer's total sales, with the clothing division suffering in the second half of the year amid unseasonable weather and increased competition from other fashion retailers.

"For the coming year, we are continuing to grow our non-clothing categories and capitalise on our market leadership in destination departments such as beauty, gift and occasion wear, whilst further reducing options in seasonal categories such as outerwear," Debenhams said.

"Our diversified business model together with strong cash generation and reducing debt means that Debenhams is in good shape to withstand a market background that remains uncertain."