Dixons Carphone warns on profit
Dixon’s Carphone, the owner of Currys PC World and Carphone Warehouse, has issued a profit warning as it reported that full year revenue has increased by 3% and that like-for-like sales have risen by 4%.
In the 16 weeks to 28 April, UK like-for-like sales edged up 1% while sales on the same basis in the retailer’s Nordic and Greek businesses grew by 8% and 10% respectively.
The fourth quarter figures meant that full year like-for-likes rose by 2% in the UK and Ireland and by 9% and 11% in the Nordics and Greece.
Due to a softer computing market in the UK and Ireland, the retailer’s category mix during the year shifted towards consumer electronics and white goods. The retailer has also been impacted by weak demand for mobile phones.
Alex Baldock, Dixons Carphone's recently joined group chief executive, said: "Eight weeks in the business have cemented my optimism about Dixons Carphone's long-term prospects. I've found exceptional strengths, and though there's plenty to fix, it's all fixable.
“We're number one in each of our markets, with people and capability no competitor can match. Our opportunity lies in making the most of those strengths, which we are nowhere near doing. And we must: nobody is happy with our performance today.“
With its international business in “good shape”, Dixons Carphone is now focusing on gross margin recovery in its UK electricals category and on improving its proposition and network agreements in the mobile category. It also plans to address underinvestment in the customer experience.
In addition, the retailer is planning to close 92 Carphone Warehouse shops as it looks to boost margins.
Dixons Carphone said it expects this year’s pre-tax profit to be around £382 million but that this is likely to decline to around £300 million for the 2018/19 financial year.
Baldock added: “We're getting on with it, through a new leadership team and structure that's promoted top talent, cleared away unnecessary layers and silos, and started to speed up decision-making. We're already giving new impetus to areas crucial to our transformation such as data and analytics, marketing, digital, services and technology.”
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