Value Retailer Sees Success in New Strategy Amidst Challenging Market Conditions
- 58% increase in adjusted EBITDA to £9.5m
- Profit before tax up 20.3% to £8.3m
- Like-for-like sales increased 0.8%
- Store sales up 2.3% offsetting a 12.1% drop in online sales
- Total revenue down 2% to £277m
- 4th quarter like-for-like sales up 6.4%
- Product margin gains of 210bps year on year
- Ongoing cost-saving measures identified over £2m annualised savings for FY26
- Opened 7 stores, closed 15, ended with 503 stores
- Positive momentum continues into FY26 with like-for-like sales up 5% in first 11 weeks
- Retailer comfortable with £11m adjusted EBITDA forecast for FY26
The Works, a value retailer, has reported a significant increase in adjusted EBITDA by 58% to £9.5m for the year ending May 4th, 2025, as its turnaround strategy delivers an uplift in underlying profits. Profit before tax rose 20.3%, and like-for-like sales increased 0.8%. Store sales climbed 2.3% on a like-for-like basis, compensating for a 12.1% drop in online sales due to capacity constraints at its third-party provider during peak trading. Total revenue fell 2% to £277m, reflecting the impact of an additional trading week in the previous year. The company achieved a ‘strong performance’ in the fourth quarter with like-for-like sales up 6.4%, driven by improved product availability and customer-focused events. The profit increase was attributed to product margin gains (up 210bps year on year) and ongoing cost-saving measures, identifying over £2m annualised savings for FY26. Launching its new ‘Elevating The Works’ strategy in January, the retailer opened seven stores, closed 15, and relocated four, ending with 503 stores (down from 511). CEO Gavin Peck expressed satisfaction with market expectations, crediting the early success of the strategy. Positive momentum continued into FY26 with like-for-like sales up 5% in the first 11 weeks, leading to a comfortable outlook for £11m adjusted EBITDA forecast.
Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about The Works’ financial performance, including specific numbers and details about their turnaround strategy and store operations. It also includes quotes from the CEO that support the claims made in the article.
Noise Level: 3
Noise Justification: The article provides relevant information about The Works’ financial performance and its turnaround strategy, with specific numbers and details on profit growth, sales, and store changes. It also includes quotes from the CEO. However, it does not delve into broader industry trends or provide significant insights beyond the company’s own statements.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses The Works’ financial performance, including a 58% jump in adjusted EBITDA, profit before tax increase of 20.3%, and like-for-like sales growth. It also mentions the company’s new strategy ‘Elevating The Works’ which has led to cost savings and improved store quality. However, there is no direct mention of financial markets or specific companies being impacted.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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