Dixons Carphone has reported another sales slump at its troubled mobile phone division, which dragged on its third-quarter performance.
The retailer’s Carphone Warehouse outlets booked a 7% fall in UK like-for-like sales in the 10 weeks to January 5, which includes the critical Christmas trading period.
Total mobile sales plummeted 12% in the quarter.
The chain flagged a continued decline in consumers opting for lengthy mobile contracts, but insisted the performance was as expected.
Overall, like-for-like group sales were up 1%. In electricals, UK and Ireland like-for-like sales were up 2%.
Trading update: We had a good Peak with performance in line with expectations, and Group like-for-like revenue up 1%. Read our full trading update for the 10 weeks, ending 5 January 2019. https://t.co/MD0L9CKfWi #DixonsCarphone pic.twitter.com/DbpHTeZNtc
— Dixons Carphone plc (@DixonsCarphone) January 22, 2019
Chief executive Alex Baldock said: “Peak trading was solid and in line with expectations, producing record sales against a tough backdrop.
“We continued to grow our leading electrical market positions in all territories, online and instore. In UK mobile, performance was as expected. Overall, our peak trading was disciplined and well-executed, with stable gross margins.
“In UK electricals we grew sales, despite a challenging backdrop and a declining market. Sales were strong in all categories, with standout performances in TV (where we drove the supersizing trend), smart tech and gaming.”
Shares were up over 2% in morning trade to 140.3p.
Mr Baldock is leading an overhaul at the Currys PC World owner and plans to shut more than 100 under-performing Carphone Warehouse stores.
The company’s shares were stung in December when it detailed mammoth write-downs on the value of Carphone, alongside a £200 million cost-cutting exercise.
However, on Tuesday, Dixons Carphone said its full-year profit guidance of around £300 million remains unchanged.
It also said that international like-for-like sales grew 5% in the reporting period, with Nordics up 3% and Greece up 19%.
Julie Palmer, partner at Begbies Traynor, said: “Dixons Carphone will breathe a sigh of relief as it avoided becoming the latest retailer to suffer from a poor Christmas trading performance as the harsh economic winter has affected the sector.
“Yet, the firm’s sales grew by only 1% as lower customer footfall and increased competition, particularly online, have taken their toll.”
