Department store Debenhams reported a 70 per cent rise in annual profits yesterday, but said a combination of the World Cup and a lack of strong fashion ranges had an impact on sales in the summer.
Reporting its first full-year results since returning to the stockmarket in May, Debenhams said pretax profits rose to #112.8 million for the year to September 2.
Total turnover grew by seven per cent to #2.19 billion but growth in like-for-like sales was flat at 0.5 per cent compared with a three per cent rise the previous year.
Debenhams was delisted following a private equity takeover in late 2003.
Chief executive Rob Templeman said: "Sales were adversely affected during June. This was predominantly caused by a combination of a delay in the launch of our summer sale due to the unfavourable weather, the World Cup and the lack of a strong fashion trend across the summer.
"Sales progressively improved during the latter months of the year."
But Mr Templeman said like-for-like sales were down by 4.2 per cent at the beginning of the current year.
"For the first seven weeks of the new financial year the retail climate has been volatile, impacted by the unseasonably warm weather," he said. He expects an improved performance during the year.
"We are also confident that the rigorous delivery of our strategy, together with the store expansion programme, will drive future growth for our shareholders," he said.
The company, which has major outlets at the Bullring in Birmingham and at Merry Hill in Dudley, has enjoyed a busy year after acquiring a string of shops from Roches in Ireland,.
It has also opened five new department stores in the UK – in Hemel Hempstead, Ayr, Newbridge, Doncaster and Workington – and is launching a number of its new women's boutiques, called Desire by Debenhams, including one at The Fort retail centre in Birmingham.
Debenhams said it believes there is the potential to increase its portfolio from 132 to 240 stores in the UK and Ireland.
Mr Templeman said autumn sales had been affected by the warmer weather continuing through September with consumers delaying buying coats and other outerwear.
Debenhams best selling ranges were its designer labels with high quality limited edition Jasper Conran coats costing between #300-#400 flying off the racks.
The group will open its first stores in India later this year and plans to have 70 international store franchises by 2010.
However analysts were not too impressed.
Philip Dorgan, analyst at Panmure Gordon, said: "These numbers will not persuade the investors who failed to buy the bull argument at the float to buy the shares.
"The suspicion will remain that Debenhams has had its best years under private equity."
Keith Bowman at Hargreaves Lansdown Stockbrokers was more upbeat, however, describing the results as "credible" and the longer term outlook "positive".
He added: "Management's conviction that the store portfolio can be increased substantially provides underlying investor optimism."