UK performance keeps Currys on track to meet reduced profit target

Christmas proved a tale of two countries for electronics retailer Currys as the business said a better-than-expected performance in the UK and Ireland managed to offset its struggles in Scandinavia.

The company told shareholders on Wednesday that trade in the British Isles had improved during the 10 weeks to January 7 – its so-called “peak” period – when compared with the rest of the financial year to date.

Sales of appliances and mobile phone equipment were strong, although that was offset by weaker sales of computing products and consumer electronics.

Thanks to a stronger performance in store than online, and as Currys cut costs to improve margins, the business achieved better-than-forecast profits in the UK and Ireland, it said.

Like-for-like sales dipped 5% against last Christmas, but improved compared with the 8% drop during the year to date.

The company’s international business saw a 7% dip, driven by Scandinavia, where sales slowed by 10% when compared with Christmas 2021.

Chief executive Alex Baldock said: “This peak has again shown Currys to be the number one choice for all things tech, helping customers shop however they want – online, in store or a mix of both – through our winning omnichannel model.

“We’ve delivered a strong peak performance in the UK&I, growing profits again through resilient sales, increasing gross margins (not least through record services adoption) and strong cost discipline. Our transformation is visibly succeeding.

“Internationally, it remains tough and we continue to face into intense, but temporary, market pressures.

“We’re not simply waiting for the external environment to improve, of course. We’ve already reduced stock levels and stepped up our measures to increase margins and reduce costs.”

The company said that, barring any unexpected deterioration in the economy, it expects pre-tax profit to reach between £100 million and £125 million in the financial year.

It had downgraded this forecast a month ago, from £125 million to £145 million previously.

On a call with reporters, Mr Baldock said some customers were shelling out on more expensive white goods because they use less energy and will save money over their lifetimes.

He also said air fryer sales have soared by 500% as people try to use less energy. But TV sales did not see a boost during the World Cup, despite them coming down in price recently, he said.

The firm said the number of customers using credit to shop with Currys hit a record high of 1.9 million, up 4.3 percentage points to 18% of its total consumer base.

It comes as the cost of living has soared, with inflation remaining at 10.5% in new Office for National Statistics data released on Wednesday.