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Dixons whacked by poor Christmas
LONDON, England -- Britain's biggest electronics retailer Dixons Group was pummeled on Wednesday after sales over the holiday period stalled. The company, which owns the Currys, PC World and The Link chains, said sales at stores that have been open for a year rose 1 percent in the eight weeks to January 4 compared with the same period the year before. UK trade was flat amid faltering sales of games consoles, audio products and warranties. Dixon's stock, which has under-preformed its peers by 10 percent over the last three months, dived 18.4 percent to 120 pence in early London trading on Wednesday. Chairman John Collins warned that because Christmas sales were below expectations, the company's full-year earnings would fall short of analysts' expectations. Analysts predicted a pretax profit of £328.5 million ($527 million) for the year ending in March, according to the consensus estimate from research group Multex. "Trading in the UK over the Christmas period has been below our forecasts,'' said Collins. "With an increasingly uncertain economic outlook and consequent risk to consumer confidence, we are cautious about the near term outlook for our markets. We therefore expect that the results for this financial year will be below current market expectations." Dixons' trading update confirms analysts' concerns that consumer spending, which has stopped the economy falling into recession, was flagging. Consumers have become more reluctant to part with their money amid signs house prices could crash next year. Meanwhile retailers have been forced to slash prices to boost sales. Dixons' trading statement typically overshadows its half-year earnings report. The company said profit before tax rose eight percent to £94.8 million in the 28 weeks to November 9, at the top end of analysts' forecast range of £89-96 million, according to Reuters. Dixons, which had been tipped to buy French rival Darty from Kingfisher, said it would focus on its existing UK and international businesses for the immediate future.
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