CentralEastern Europe markets increasingly challenging
Seeing weak demand for clothing and general merchandise
More management changes
Shares down as much as 15

LONDONGDANSK, Sept 28 Reuters Discount retailer Pepco Group lowered its profit outlook for the second time in less than three weeks, blaming an increasingly challenging trading environment in its core markets of Central and Eastern Europe and a loss of focus from management.

The Warsawlisted group, which owns the Pepco, Poundland and Dealz brands, had performed resiliently through the first year of the cost of living crisis, but had cautioned in July that sales growth had started to slow.

Its shares fell as much as 15 in morning trade on Thursday after it highlighted weaker consumer demand for its key clothing and general merchandise categories, leaving the stock price down 43 this year.

Executive chairman Andy Bond said on a call for analysts that whilst the group delivered good underlying sales growth in July, helped by a promotion of Barbie merchandise, likeforlike sales in the main Pepco business were negative in August and further deteriorated in September with double digit declines in the month to date.

The group said it had not, as yet, seen an expected recovery in gross margins as it continued to work through inventory from earlier in the year bought at a higher cost.

We overbought for springsummer and we39;re just struggling to digest all of that product, said Bond.

The landing of Pepco39;s…