Currys Trims Profit Forecast as Supply-Chain Problems Bite
(Bloomberg) -- U.K. consumer-electronics retailer Currys Plc lowered its profit forecast after a tough Christmas season, one of the few such downgrades after most British retailers enjoyed better-than-expected holiday sales.
The company, which owns the Currys PC World brand, said Friday its comparable revenue fell 5% over the peak period compared to the previous year. Supply log-jams across the electronics industry and uneven consumer demand weighed on sales. The stock fell as much as 5.7%.
Currys has been left out of a bumper U.K. retail sales season that has seen strong revenue reports and profit upgrades from a wide range of companies from Tesco Plc to Marks & Spencer Group Plc. The technology market has been hit by the global shortage of chips as well as the wider issues in moving stock around the world.
Currys said while demand for some items was uneven, gaming products such as PlayStation 5 consoles and Oculus Quest 2 virtual -reality headsets “flew off the shelves.” The chain could likely have sold even more if supply had been better. In November, Sony Group Corp. reduced its PS5 production outlook for this fiscal year due component and logistics constraints.
Currys, formerly called Dixons Carphone, said it expects adjusted pretax profit target of 155 million pounds ($213 million) for the fiscal year. The previous forecast was 160 million pounds.
In December, Currys warned that the market was softening in the run-up to Christmas, and that the resurgence in Covid cases as a result of omicron could further affect the vital period. The retailer is in the midst of a turnaround that has focused on lowering costs, closing stores, reducing exposure to a difficult mobile-phone business while investing in growth areas, such as its gaming division.
Chief Executive Officer Alex Baldock said that despite the muted festive performance, Currys grew market share with U.K. sales over Christmas declining less than the 10% year-on-year drop in the technology market overall.
“We’ve had problems getting hold of people, containers and products,” Baldock said. “We’d always like more gaming consoles, more of the virtual reality products that are breaking into the mainstream and more Dyson haircare and Apple products. We did get more than competitors, which is why we were able to gain market share, but we always want more.”
The company also started a 75 million-pound share buyback program Friday.
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