Currys, the electricals retailer, has reported a boost in sales in the UK and Ireland, raising hopes for a pick-up in business. The company’s shares jumped more than 6% in early trading, although they remain down 33% over the past year. Consumers grappling with a cost-of-living crisis have avoided some big-ticket items, such as televisions and computers. However, Currys CEO Alex Baldock said that while consumers were still under financial pressure, there had been a rise in spending in the past couple of months. “We’re often first in and first out of a downturn and we flagged particularly strong trading for the last two or three months of the financial year in the UK,” he said.
Currys lowered its guidance in March due to the weak performance of its Nordics business, but said it now expected to report adjusted pretax profit of £110m (€126m) to £120m in the year to April 29. This is ahead of the March guidance of about £104m, but down from the £186m made in 2021-22. The company reported strong sales in the UK, but has been hit in the Nordics, where rivals have slashed prices to sell off excess stock. Currys has responded by installing a new chief executive for the region and cutting costs, including jobs.
Currys, which also trades in Greece, said full-year profit in its international division would be “materially lower” because of the Nordics performance. It noted new management put into the Nordics business in March had made progress and was removing £25m of annual costs. Currys said it expected to end the year with net debt of about £100m, versus previous guidance of up to £150m.
Currys’ positive update comes amid tough times for retailers in the UK. The country’s high street has seen numerous high-profile collapses in recent months, with Toys R Us, Maplin and Poundworld all going into administration. Meanwhile, House of Fraser, New Look and Debenhams have all been forced to close stores and cut jobs in a bid to stay afloat. The retail sector has been hit by a combination of factors, including the rise of online shopping, the fall in the value of the pound and the squeeze on household incomes.
Currys’ ability to weather the storm is partly due to its focus on technology, which has remained in demand despite the economic uncertainty. The company has also been proactive in responding to changing consumer habits, investing in its online offering and expanding its range of services, such as installation and repair. In addition, Currys has sought to differentiate itself from competitors by offering exclusive products and services, such as its Knowhow tech support service.
However, the company faces challenges in the coming months, including the ongoing uncertainty around Brexit and the threat of further economic turbulence. In addition, Currys will need to continue to adapt to changing consumer habits, particularly as more people shop online. The company will also face competition from new entrants to the market, such as Amazon, which has been rapidly expanding its range of tech products and services.
Despite these challenges, Currys’ positive update is likely to be welcomed by investors, who have seen the company’s shares fall sharply over the past year. The company’s ability to weather the storm in the retail sector is a testament to its focus on technology and its proactive approach to responding to changing consumer habits. While the challenges facing the company are significant, Currys’ strong position in the market and its track record of innovation suggest that it is well placed to continue to thrive in the years ahead.