N Brown Group PLC (LON:BWNG) has said it is trading in line with expectations after posting an improvement in sales compared to the start of the coronavirus (COVID-19) pandemic.

Full-year adjusted underlying earnings (EBITDA) are forecast to come in at £84mln-£86mln, the retailer added, down from £106mln a year ago.

READ: N Brown wants to raise £100mln and move to AIM after profits decline

The group also expects to offset more than 80% of its absolute gross margin decline, driven by the pandemic’s impact on sales and bad debt provisions, through operational cost savings.

However, depreciation is estimated to be higher than last year due to a change in strategy, while year-end net debt is forecast to be £285mln-£305mln, down from £497mln in February 2020.

Revenue for the 18 weeks to January 2, 2021, dropped by 9%, albeit improving from a 13% slip in the 13 weeks to August 29, 2020, and a 22% fall in the 13 weeks to May 30, 2020.

Customer trends in the period continued to reflect the COVID-19 environment, N Brown said, with particularly strong demand for computing, gaming and white goods, while Home & Gift sales now comprise 42% of product revenue, compared to 32% in the same period last year.

Within Apparel, strong growth in leisurewear and nightwear was offset by a decline in dresses, formalwear and swimwear.

Last month, the JD Williams owner completed a £100mln capital raising and move to AIM, which allowed it to repay all unsecured debt and further invest in digital capabilities.

The former catalogue retailer said it is currently experiencing delays of two to three weeks for many of its stock deliveries, given global container issues, as well as seeing cost pressure in the supply chain.

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