Pepco Group reports strong Q4 performance driving revenue growth

Pepco Group expects full year revenue to exceed 4.5 billion euros (5.11 billion dollars). The UK-registered discount retailer released a pre-close trading update for the 51 weeks to September 20, 2026, ahead of its full year preliminary results scheduled for December 9, 2026.

Strong final quarter drives growth

The group achieved constant-currency revenue growth of 15.6 percent in the fourth quarter to date, with like-for-like (LFL) revenue growth excluding fast-moving consumer goods (FMCG) reaching 9.5 percent. Including FMCG, fourth-quarter LFL revenue growth stood at 9.4 percent.

For the 51-week period ending September 20, 2026, LFL revenue growth excluding FMCG was 5.9 percent, or 3.8 percent including FMCG. Total constant-currency revenue for the period rose 8.3 percent.

Full year constant-currency revenue growth is projected at approximately 8 percent, reaching the top of management's 6 percent to 8 percent guidance range. Full year gross margin is expected to hit approximately 51 percent, up 200 basis points year-over-year. Sourcing efficiencies, a favourable product mix following the exit from FMCG categories, and foreign exchange tailwinds supported the expansion.

Commenting on the update, Stephan Borchert, chief executive officer of Pepco Group, said: “FY26 has been a defining year for Pepco Group. We have completed the transformation of our portfolio into a pure-play Pepco business, and the momentum behind the brand has built steadily through the year." "The fourth quarter has been our strongest since we reset the strategy, and marks eight consecutive quarters of positive like-for-like sales growth. We now expect to deliver full year revenue growth at the top of our guidance range, together with mid-teens EBITDA growth and a step-change in net earnings."

Regional performance and store expansion

Western Europe led performance in the fourth quarter to date, reporting LFL revenue growth excluding FMCG of 14.9 percent. Performance was supported by Spain, where LFL growth excluding FMCG remained above 20 percent following the conversion of the Pepco Plus estate.

Central and Eastern Europe (CEE) North recorded LFL revenue growth excluding FMCG of 8.8 percent, while CEE South saw an 8.2 percent increase. In Poland, LFL revenue growth excluding FMCG reached 5.9 percent.

Fourth-quarter LFL growth was further aided by planned inventory clearance, which delivered record stock freshness at year-end while creating a one-off gross margin impact of approximately 200 basis points. Management estimates this clearance boosted fourth-quarter LFL growth by three to five percentage points.

Pepco Group expects to finish the financial year with approximately 250 net new stores, bringing its total store network to around 4,260 locations by September 30, 2026.

Financial outturn and capital return plans

Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) growth under IFRS 16 is expected in the mid-teens, meeting prior guidance. Underlying net earnings growth is projected to exceed 60 percent, outperforming the previous guidance of above 50 percent.

Following the sale of Dealz Poland on July 10, 2026, Pepco Group operates as a pure-play Pepco business. Following a 400 million euro tender buyback completed in August 2026, the board approved a new multi-year share buyback programme of up to 400 million euros, to be deployed between FY27 and FY29.

The company has also initiated the cancellation of 51,153,590 ordinary shares held in treasury, which is expected to complete on or around November 13, 2026. Upon completion, total issued share capital will reduce from 577,451,935 to 526,298,345 ordinary shares.