Gamers help Currys as tech chain battles Omicron and supply disruption: reaction
Electrical goods retailer Currys saw sales cool over the key festive trading period after it was challenged by “uneven customer demand and supply disruption” but described its performance as resilient.
The group, which has brought several brands together under a recent restructuring, said demand for some tech was “strong”, such as virtual reality consoles which “flew off the shelves”.
It added that other games consoles, including the PS5, and home appliances also performed well over the period.
However, the firm said the overall UK tech market shrank by around a tenth compared with the same period a year earlier.
Currys reported that like-for-like group sales dropped by 5 per cent for the ten weeks to January 8 compared with the same period last year, but were 4 per cent above pre-pandemic levels.
Sales in the UK and Ireland were 6 per cent lower than during the same period 12 months earlier.
UK online sales jumped by 29 per cent against pre-pandemic levels as the company continued to see momentum across its digital business.
The group’s international division saw sales decline by 3 per cent over the period compared with 2020, although this was 14 per cent ahead of figures from two years earlier.
Group chief executive Alex Baldock said: “The technology market was challenging this Christmas, with uneven customer demand and supply disruption.
“Against this backdrop, Currys’ colleagues showed their resilience and the stronger business we've built. We gained market share, improved customer satisfaction, traded profitably and can look ahead with confidence.”
He added: “Customer demand for some tech was strong. This was a gamers’ Christmas, the year that virtual reality broke into the mainstream, and when consoles flew off the shelves.
“Currys came through this market turbulence well. We gained share in the UK, extending our market leadership. At the same time, we focused on profitable sales, with good discipline on margin, cost and stock.
“The stronger business we've built was evident in record levels of colleague engagement and customer satisfaction.”
The group, which has brought together the Currys PC World, Carphone Warehouse, Team Knowhow and Dixons Carphone brands, expects to post adjusted pre-tax profits of £155 million for the current financial year as a result of the performance.
The retailer also launched a £75m programme of purchasing shares back from shareholders on Friday.
Adam Vettese, an analyst at investment platform eToro, said: “With its dominant position in the market, Currys was expected to have a bumper Christmas trading period. However, Omicron and the global supply bottleneck led to a softening demand at the worst time of year for a retailer.
“While total sales slumped amid a general weakening of tech demand among consumers, a bright note was the huge uptick in online sales. Another positive was the strong demand from gamers, with virtual reality headsets increasing in popularity.
“Currys’ shares have been hit hard this morning as the firm lowered its full-year profit guidance, which is perhaps unsurprising. But looking further ahead, its position in the market is undisputed and we see a return to sales growth once Omicron and the global supply crisis ease.”