Pepco Group’s 2025 financial year was marked by strong financial performance and rapid implementation of the strategic framework presented in March. The group opened 247 new stores net, cleaned up its portfolio and identified the Pepco brand as the primary growth engine, while focusing on higher-margin clothing and general merchandise categories.
The shift in focus was helped by the sale of Poundland, which was completed in June 2025, and the exit of the FMCG product range. The group says this has created a simpler, more efficient operating model that can respond more quickly to changing customer needs across Europe. “2025 was a real turning point for the Group,” said CEO Stephan Borchert, highlighting that the strategy built on the Pepco brand and core business delivered tangible results in a short time.
Sales grew by 8.7% to €4.5 billion, with like-for-like sales expanding by 2.6%. Underlying EBITDA (IFRS 16) rose by 10.3% to €865 million, while gross margin improved by 100 basis points to 48.0% – the group attributed this in part to improved operational efficiency and the FMCG exit. Underlying net profit grew by 19.7% to €219 million, with free cash flow of €334 million. Pepco Group refinanced its debt portfolio, extended maturities and reduced average interest costs, which increased financial flexibility.
By the end of 2025, the network had expanded to 4,359 stores. The focus of the expansion continued to be on the high-return Central and Eastern European and Western European markets. Meanwhile, the group has accelerated its digital transformation: it is timing the launch of a new website, mobile app and loyalty program for the first quarter of 2026, in parallel with the development of the supply chain and data systems.
Social programs continue to run in the Future at Heart initiative: the company spends more than 3 million euros annually on educational projects supporting children, with more than 50 civil partners, reaching more than 90 thousand children per year. Looking ahead, Pepco Group plans to open around 250 new stores in the 2026 financial year, mainly in Central and Eastern Europe, while also accelerating expansion in some Western European markets, such as the Iberian Peninsula and Italy.
