Debenhams raises guidance following adjusted EBITDA growth

Manchester-based Debenhams Group, the online platform operated by Boohoo Group plc, has announced it delivered 53 million pounds (70.16 million dollars) in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the financial year ending February 28, 2026. This figure represents a 36 percent increase compared to the previous year and sits comfortably ahead of the guidance issued by the board in January 2026.

The performance was bolstered by a significant 76 percent increase in adjusted EBITDA during the second half of the year. While gross merchandise value (GMV) trends remained negative, the group reported three consecutive quarters of improvement, ending February at 5 percent below the prior year.

Strategic pivot to marketplace model

The group is currently transitioning to an asset-lite marketplace model, which group chief executive officer Dan Finley credited for the improved financial standing. As part of this turnaround, the company has completed a warehouse consolidation, rightsized its stock base, and delivered a new technology re-platform. “Our pivot to the stock-lite, capital-lite, highly profitable marketplace is working,” Finley stated. He noted that the cost base has been reset and the majority of onerous costs have been exited, allowing the management team to shift its focus toward growth.

The group's cost-reduction strategy resulted in a fixed cost exit rate of 119 million pounds, which was 11 million pounds lower than the 130 million pounds guided in February 2026. The company remains on track to reach a fixed cost target of 100 million pounds in the financial year ending February 28, 2027.

Debt reduction and cash flow outlook

Debenhams Group reported net debt of 90 million pounds at the end of February 2026, representing less than two times adjusted EBITDA. This reduction was supported by a 40 million pound fundraise completed in February 2026. The board expects net debt to fall below one time adjusted EBITDA by the end of FY27.

Following the 53 million pound adjusted EBITDA outturn for FY26, the board has raised its FY27 guidance, expecting double-digit growth in adjusted EBITDA. The group, which serves millions of customers across destinations including Debenhams, Karen Millen, Boohoo, MAN and PLT, remains focused on growing its marketplace model.