Matalan - comment

LTM EBITDA of £70m is now significantly ahead of our projections of £60m at the start of the year. Once adjusting for the 14th week, Q225 itself was only marginally ahead of expectations, but considering that the consumer environment is lagging far behind, we rate this as a result. Management are looking to take more fashion risk earlier in the seasons, a play with fire from the creditors’ perspective, but the retailer has to raise margins, which in this promotional environment are suffering again from higher markdowns. Stock is clean for AW25/26, and liquidity is strong. The company even bought back and cancelled £5m SSNs.