Matalan's EBITDA rises despite sales decline amidst challenging market

Matalan, the UK-based omnichannel fashion and homeware retailer, has reported a 9 percent dip in full-year sales to 985 million pounds. However the strategic emphasis on driving profitability resulted in a 6 percent year-on-year increase in EBITDA to 56 million pounds for the year ended February 22, 2025, with an 11 million pounds improvement in the latter half of the year.

Gross margin improved 3 percent to 510 million pounds, while the company’s loss before tax reached 67 million pounds.

Matalan improves profitability

Commenting on the full year trading update, Karl-Heinz Holland, executive chair, said: “In the last year our focus has been on further driving the transformation of Matalan against a challenging consumer and wider economic backdrop. The additional £25m of funding secured from our core investors post-year end has now enabled us to start to accelerate our strategic plan.”

“With a clear focus on maintaining profitability, we have delivered EBITDA growth. Our store investment plan is delivering results even better than we expected, and we’re making good headway on our plan to open 10 new stores and upgrade 30 existing locations in FY26,” Holland added.

Matalan reveals cautious outlook

However, against a more challenging UK consumer environment and an uncertain global macroeconomic backdrop, management’s outlook for the remainder of the current financial year remains cautious.

Looking ahead, Matalan's positive momentum from the fourth quarter has carried into the first quarter of FY26, with EBITDA for the last 12 months reaching 64 million pounds. Despite the tough operating environment, Karl-Heinz Holland asserts confidence in "the strength of the Matalan brand and the opportunities ahead."

“While we started the new financial year with positive momentum, we continue to operate in an increasingly competitive market and uncertain macroeconomic conditions. Against this backdrop, we remain mindful of the tough operating environment and know there is much more to do to complete our transformation.”