Debenhams cautions UK trading more volatile as sales slide

LONDON (Reuters) - Debenhams, Britain's second-biggest department store, said trading had become more volatile in the second half of the year and warned its 2017 profit could slip towards the lower end of expectations if conditions did not improve.

The retailer, in the middle of a turnaround programme led by new Chief Executive Sergio Bucher, reported a 0.9 percent fall in group like-for-like sales in the 15 weeks to June 17, its fiscal third quarter.

It said it anticipated that 2017 profit before tax would be within the range of market expectations. However, it said that should current market volatility continue, the outcome could be towards the lower end of the current range.

The update was the first since April, when Bucher detailed the outcome of his strategic review. He plans to return the group to profit growth by closing some stores, revamping the rest and improving its online service. He also plans to seek efficiencies by simplifying the business.

Debenhams said a more solid performance in areas including Beauty, Accessories and Food & Drink had helped to mitigate the impact of a weaker clothing market.

Prior to Tuesday's update analysts were forecasting an underlying pretax profit for 2016-17 of around 100 million pounds, according to Reuters data, down from 114 million in 2015-16.

"As industry data has confirmed, May was a tough month for retailers and we continue to see volatility in trading week to week," Bucher said. "As a result we are focused on delivering cost control and self-help through our "Fix the Basics" plan."

(Reporting by James Davey; editing by Kate Holton and Jason Neely)