Pepco, the former owner of Poundland, reported strong financial results in its first quarter after selling off the struggling discount chain.

The company saw its group sales without Poundland go up by 7.7% to £929m in its third quarter that ended on 30 June, which was an increase of 2.6% on a like-for-like basis.

In particular, Pepco experienced a successful period, with its sales going up by 7.4% to £859m, which was driven by the discount retailer expanding its fleet with 44 new stores.

Stephan Borchert, Pepco Group’s chief executive commented: “Our results in Q3 reflect our continued strategic execution across ‘New Pepco Group’ and actions we have taken to drive more consistent performance.

“This outstanding performance at Pepco—the engine of the Group’s earnings potential—was driven by improved availability, a focus on price leadership of its best-selling items, and improved product ranges, which supported our continuous improvement of LFL sales and volume growth in the period.

Subscribe to Grocery Gazette for free

Sign up here to get the latest grocery and food news each morning

Moving forward, Pepco expects to maintain its strong momentum and projects high single-digit EBITDA growth for the Pepco brand and an estimated EBITDA of £25.8m in its Dealz sector.

However, Poundland continued to deliver weak results, with revenue falling by 10.3% to £299m in the third quarter until its acquisition on 12 June.

The struggling discounter is undergoing a restructuring plan under Gordon Brothers, which may include axing 68 locations in an attempt to stay afloat.

Borchert added: “Having completed the sale of Poundland in June 2025, New Pepco Group now has a simpler structure, and we look forward with confidence to capitalising on the numerous growth opportunities for the Pepco brand as part of our ambition to become one of Europe’s most successful discount retailers.”