UK Retailer Currys Warns of Softer Market in Recent Weeks

Currys Warns of Softer Market Amid Omicron Concerns

By James Davey

LONDON (Reuters) -British electricals retailer Currys on Wednesday reported a 20% rise in first-half profit but cautioned that its market softened over the Black Friday period and in the run-up to Christmas, sending its shares sharply lower.

The stock was down 10.2% at 0906 GMT after the group said the immediate outlook has become more uncertain, with the Omicron coronavirus variant and associated government restrictions potentially dampening demand further.

“Against this backdrop, we have taken market share in the UK, margins have remained stable and customer satisfaction has further improved,” said the group, which trades from more than 800 stores in seven countries and online.

Despite the challenges, Currys said it remained on track to meet expectations it set out in November for full-year adjusted pretax profit of about 160 million pounds ($211.9 million), up from 156 million pounds in 2020-21.

The group previously known as Dixons Carphone lifted adjusted pretax profit to 48 million pounds in the six months to Oct. 30, against 40 million pounds in the same period last year, on revenue down 2% at 4.79 billion pounds.

British retailers are grappling with international supply chain delays that are being compounded by labour shortages in domestic transport and warehousing networks, with a particularly acute shortage of drivers.

Currys said it had coped well with the supply chain challenges, mitigating the impact for customers by making the most of the strength of its supplier relationships to maintain market-leading product availability, with 15% more stock in the business than at this time last year.

But it said there were associated costs and there has been some impact on product availability and sales of some in-demand products.

“For example, in large-screen TVs our customers might have to do with a choice of 100 models rather than the 120 that we would prefer to put in front of them,” CEO Alex Baldock told reporters.

“We’re calling this out as a challenge, but we’re also calling this out as a challenge that we’re riding out.”

($1 = 0.7551 pounds)

(Reporting by James DaveyEditing by Louise Heavens and David Goodman)