Currys has reported a significant increase in sales over the summer months, driven by strong demand for televisions during the World Cup and fans amid heatwaves. The electricals retailer bucked the trend of a struggling British high street, which has been impacted by rising inflation and economic uncertainty.
In the 17 weeks leading up to August 29, Currys saw a 6% rise in like-for-like sales in Britain, contributing to a 7% overall group sales growth. The company's Nordic operations also performed well, with a 9% increase in sales. In addition to electronics, the company noted sustained momentum in its higher-margin recurring services, including its iD Mobile network, which expanded its subscriber base by 16% year-on-year to 2.7 million, and a rise in the adoption of its 'flexpay' credit offering.
Despite the positive sales figures, the company maintained its annual financial guidance, indicating confidence in its performance for the remainder of the year. Currys is currently executing a £50 million share buyback program, having completed £23 million of it. The retailer expects to conclude the year with net cash significantly exceeding its £100 million target.
Fredrik Tønnesen, who assumed the role of Group Chief Executive on August 3, expressed confidence in the company's outlook. "Currys has maintained its strong momentum," Tønnesen stated. "Across the Group we saw growth in both stores and online, with new categories, B2B and Services all growing strongly."
He highlighted market share gains in the UK and Ireland, even in a generally flat market that was somewhat bolstered by the World Cup and summer heatwaves. The Nordic region also saw market share increases across most categories and countries within a growing market.
Currys previously raised its annual profit forecast in May, projecting profits between £180 million and £190 million, later updated to £191 million. The company's shares saw a minor dip of 0.4% to 151.10p on Thursday morning, though they have risen over 12% in the past year.
Navigating Future Challenges
Tønnesen takes the helm at a time when the company has overcome some of its past challenges, including integrating the legacy of Carphone Warehouse contracts and improving its online presence and customer service. The Nordic business, under Tønnesen's previous leadership, has become a strong contributor, accounting for approximately 40% of group revenue.
However, the new CEO faces a complex economic environment marked by rising employment and energy costs, alongside business rates challenges for a company with a significant physical footprint. Competition from online rivals like Amazon remains a constant factor.
Market analysts suggest that Tønnesen's extensive experience within the company, particularly in the Nordic region, will be beneficial. There is a potential focus on further developing recurring revenues, which are less sensitive to economic downturns. The company's current strong cash position provides a financial buffer to navigate potential economic headwinds.