Dixons Carphone hails bigger than ever Black Friday as profits beat forecasts
Dixons Carphone shares climbed three per cent higher this morning after the high street electricals giant beat City expectations with a 23 per cent jump in first-half profits.
The FTSE 100 company, which trades as Currys, PC World and Carphone Warehouse in the UK and Ireland, said strong performance in the UK helped it outperform the market and offset weaker trading in the Nordics, which was hit by falling oil prices and the depreciation of the Norwegian krone.
It made an underlying pre-tax profit of £121m in the six months to 31 October compared with £98m the same time last year, which was ahead of analysts' average forecast of £111m.
Group sales at stores open for more than a year rose five per cent, driven by a seven percent rise in the UK & Ireland, where the firm gained market share in the mobile market following the collapse of Phones 4U last year.
Chief executive Sebastian James said its UK & Ireland business recorded a profit in every single month for the first time in years, resulting in a 31 per cent rise over the six months to 31 October to £101m.
“It has been a really good first half against a flat half for the electricals and mobile market,” James said, adding that the performance was “particularly pleasing” given tough comparatives on last and that there were no major sporting events this year.
The period covered by the results did not cover Black Friday however James confirmed that it had been Dixons Carphone’s “biggest day right across the group” including the Nordics.
The company said it increased the number of Black Friday deals this year by a third and had more than 3.5m visits on the day, with five online orders were completed every second during its peak hour between 8-9am.
However James said the majority of sales still took place on the high street, with around 40 per cent buying online but around half of those orders being collected in shops. “People were playing it safe after last year and booking online but coming to collect in store,” he said.
This is despite figures from the British Retail Consortium suggesting that shoppers shunned the high street in favour of shopping online, with retail sales falling by 0.4 per cent in November.
Industry experts and analysts have warned that Black Friday discounts are pulling forward Christmas sales and hurting margins by prompting retailers to offer promotions on products that they could otherwise be selling at full price.
However James said that by working with suppliers a year in advance on particular deals it was able to protect margins.
The group was also confident about sales in the coming weeks: "We are still optimistic about having a good Christmas trading period," James said. "We had a record Boxing Day last year and we're looking forward to doing the same again."