Executive Summary

• UK-based department store chain Debenhams reported gross transaction value sales of £2,954 million for FY17, up 2.0% year over year, and above the consensus estimate of £2,947 million.
• FY17 statutory revenues came in at £2,335 million, up 1.1% year over, and group comparable-store sales decreased 0.2% year over year on a constant-currency basis. UK reported revenues were down by 0.7% and UK comparable-store sales were flat year over year.
• The FY17 gross margin contracted by 50 basis points to 12.4% and underlying EPS decreased by 14.7% year over year.
• For FY18, Debenhams forecasts gross margin erosion of 25 bps year over year and an increase in total costs of 1.0%–2.0% year over year. Management did not issue sales guidance.