UK electricity retailer Currys has warned supply chain turmoil will continue after product shortages and ‘bumpy’ demand dented Christmas profits.
Known as Dixons Carphone until last year, the company had adjusted pre-tax profit of £155m on the estimate of £160m just before peak trading for the year until the end of April. I expect it.
Despite the launch of the planned share buyback program, the stock fell 5% at the start of Friday’s session.
The group’s revenue for the 10-week period to Jan. 8 fell 5%, worse than the 2% drop reported in half-year results just a month ago.
In the biggest markets, the UK and Ireland, sales fell 4% in six months, compared to a 6% drop year-on-year, but still fell short of an estimated 10% drop on the whole market. It was.
CEO Alex Baldock said sales of games consoles, virtual reality products, Apple computers and Dyson hair dryers were strong, but the company’s inventory was not as high as expected.
Demand was weak in other areas, particularly televisions, smart technology and vacuum cleaners.
Baldock struck a cautious note for the rest of the year, saying the company is “preparing for another year of supply disruption.”
He also said there were already signs that consumers were thinking twice about buying expensive tickets. “What about real wages, discretionary income and the housing market? What does all this do for consumer confidence? »
Currys enjoyed a long period of active trading during the Covid-19 pandemic as household savings piled up and consumers bought laptops and printers for telecommuting and gaming devices during the lockdown.
But it, and other “pandemic winners” such as Kingfisher and Halfords, are increasingly in competition with the strong trading volume of the previous year.
Baldock said the company’s forecast was based on demand returning to pre-pandemic levels, citing growth in gaming, continued remote working and more frequent product changes as drivers for future demand. He said he didn’t expect it.
He added that this was well above the same period two years before the start of the pandemic. “The market was still 8% bigger than it was two years ago.”
Investec Bank analyst Ben Hunt said the warning was “disappointing” but the downgrade was modest and the company was more streamlined and able to generate cash than before.
Supply chain issues hamper Christmas trade at Currys Source link Supply chain issues hamper Christmas trade at Currys