Like-for-like sales up 0.1% at department store chain, while gross margin is ahead of target.
Gross sales value for the 18 weeks to January 2 was up 1.6% compared with the same period last year.

Like-for-like (lfl) sales were up just 0.1% but still in line with the retailer's internal forecast. Debenhams explained that trading performance was impacted by the switch from concessions to own bought ranges, reducing lfl sales by 1.5% since the start of the financial year.

Gross margin year-to-date was described as "particularly pleasing" in the Q1 interim management statement. The "significant improvement" on last year was achieved, said Debenhams, through a focus on its own bought ranges, as well as a lower markdown.

Credit Suisse, which described Debenhams' Q1 results as "relatively muted", believes the retailer is still currently ahead of its full year guidance of 50-60bps but that it expects to give some of this back in end of season clearance. However, the financial services group predicts that Debenhams will maintain existing gross margin guidance for the full year.

Debenhams chief executive Rob Templeman said: "We are pleased with with our overall performance in the first 18 weeks of the year which was in line with our own forecast. Our continued focus on cash margin means that for the second year in succession we have delivered an increase in profit before tax over the Christmas trading period.

"Looking forward, with the rise in VAT and a general election pending, the consumer environment remains uncertain and difficult to predict. Against this backdrop, we will continue to execute our strategy of improving gross margins through the expansion of our successful and exclusive Designers at Debenhams ranges

He added: "We believe that the strength of our own bought offer will enable us to expand gross margins throughout the remainder of this year."

Credit Suisse also believes that full year profit estimates for Debenhams, which are in the mid-to-late £130 millions, are being held.