Pepco Group's strong FY25 results validate return to clothing and general merchandise

Pepco Group N.V., the leading pan-European variety discount retailer, has reported a "real turning point" in its preliminary results for the 12 months ended 30 September 2025. Following the implementation of a new strategic framework in March 2025, the Group delivered strong financial performance driven by a return to its core model of clothing and general merchandise and the successful exit from FMCG operations.

The Group saw significant growth across all key financial metrics for its continuing operations with revenue growth of 8.7 percent to 4.5 million euros, supported by a return to positive like-for-like (LFL) sales of 2.6 percent. Underlying EBITDA grew 10.3 percent to 865 million euros, while underlying net earnings surged 19.7 percent to 219 million euros. Group gross margin improved by 100 basis points to 48 percent, reflecting enhanced operational efficiency and the impact of the FMCG exit.

"2025 was a real turning point for the Group," said Stephan Borchert, chief executive officer. "The decision to refocus on Pepco and exclusively on our core categories... has been validated by these strong results".

A central pillar of the year’s success was the simplification of the Group's portfolio. The sale of Poundland was completed on June 12, 2025, and the Group successfully exited the FMCG category within the Pepco brand. Plans were also announced to commence the divestment process for Dealz in 2026, which is now operating as a fully independent entity.

Expansion remained a priority, with the Group opening 247 net new stores, bringing the total estate to 4,359 locations. Western Europe, particularly Iberia and Italy, emerged as a significant growth engine, while a turnaround in Poland restored positive momentum in the second half of the year.

Management expressed increased confidence in the Group's trajectory, leading to an upgrade in mid-term guidance. For FY26, Pepco expects underlying EBITDA to grow by at least 9 percent and underlying net earnings to exceed 25 percent and revenue growth of 6 percent to 8 percent. Looking toward 2030, the Group has set a new target for underlying net earnings growth of at least 15% percent CAGR and upgraded its gross margin target to 48.5 percent.