Pepco Group shares soar as strong trading update signals growth momentum

Investing.com - Pepco Group NV shares surged 11.7% on Thursday after the pan-European discount retailer delivered a robust pre-close trading update that showed accelerating sales momentum and confirmed its full-year outlook at the upper end of previous guidance.

The company, which completed the sale of Poundland in June 2025, reported that its "New Pepco" business is expected to generate revenues exceeding €4.5 billion for fiscal year 2025, up from €4.2 billion in 2024.

Underlying EBITDA growth is projected to reach the top end of the high single-digit range previously guided, with net earnings growth significantly outpacing EBITDA expansion.

Pepco has seen encouraging momentum in like-for-like revenues, which increased 2.7% over the 51 weeks to September 21, with fourth-quarter performance accelerating to 3.9% growth - the company’s strongest quarterly performance in two and a half years.

The company has successfully completed its exit from FMCG products, focusing instead on higher-margin clothing and general merchandise categories.

"The last twelve months have been a transformational year for the business, as we reset our strategy and set about delivering, at pace," said CEO Stephan Borchert. "Our business is reshaped and simplified, focused on our core Pepco brand in key regions across CEE and Western Europe."

The company announced a second €50 million share buyback tranche to commence in October, following completion of the first €50 million tranche in August. These buybacks are part of a €200 million program authorized through FY27.

Western European stores delivered particularly strong results with 6.7% like-for-like growth through the year, while Poland showed recovery in the second half with 2.6% like-for-like growth. The company plans to finish the year with 248 net new stores, in line with previous guidance.

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