Dixons Carphone reports mixed performance over festive period

Dixons Carphone reported a rise in electricals revenue over the festive period but a drop in mobile sales on Tuesday as it said it was on course to deliver on its full-year expectations.

In an update for the 10 weeks to 4 January, the operator of Currys PC World and Carphone Warehouse said UK & Ireland electricals like-for-like revenue edged up 2%, with broad-based growth and strength in TVs, gaming, smart technology and small domestic appliances.

International electricals LFL sales rose 3%, with Nordics and Greek revenue 3% and 6% higher, respectively.

It was different picture for the mobile segment, however, with UK & Ireland LFL revenue down 9% but the performance in line with expectations.

Overall, Dixons’ group sales were down 2% on a reported basis and flat on a like-for-like basis and the group said there was no change to the financial guidance given at the interim results.

The company said market share gains had accelerated both in store and online.

Chief executive Alex Baldock said: "We've had a good peak in a weak UK market and we're on track to deliver what we promised for this year, and with our longer-term transformation."

Baldock said customers loaded up on "amazing technology" over Christmas. The company sold 75% more 65+ inch TVs, while Dyson health & beauty sales rose more than 20% and Shark vacuum sales almost doubled. It also sold 8,000 smart speakers each day.

"We broke records on wearables like Fitbit and Apple Airpods, while gamers couldn't get enough of the Nintendo Switch," said Baldock. "Our new Gaming Battlegrounds showed the exciting potential of more enticing, immersive store experiences and drove strong sales and share gains."

At 0855 GMT, the shares were up 4.7% at 149.20p.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Boosting the online business is one of the pillars of the turnaround plan, so it’s good to see Dixons making headway in this area, particularly in such a crowded marketplace."Dixons is on the right road, but the journey isn’t over. It’s encouraging to see growth in electricals, suggesting the investment to improve customer proposition hasn’t been wasted money. The decision to offer a price-promise in particular has helped the tills chime, but we’re yet to see the impact on margins.

"Challenges do remain though. The UK & Ireland mobile market is still incredibly tough as people are upgrading their phones less often and opting instead for less lucrative SIM-only contracts. Overall Dixons is doing well to offset that major headwind, and there are certainly some bright spots, but we’d like further proof performance isn’t likely to take an unexpected turn."