Dixons left red-faced over results blunder
7am: Reports a 2pc Christmas sales RISE 1.40pm: Reveals that sales actually FELL 2pc
BOSSES at dixons Carphone were left red-faced yesterday after they were forced to issue a correction to its Christmas sales figures.
At 7am the owner of Currys pC World and Carphone Warehouse published an upbeat trading statement declaring group revenues had climbed by 2pc.
Shares rose sharply on the back of the update as booming demand for large televisions, dyson hairdryers and Shark vacuum cleaners offset a slump in demand for mobile phones.
But at 1.40pm, almost seven hours after the initial announcement, dixons admitted there had been a ‘clerical error’ and sales had in fact fallen 2pc in the ten weeks to January 4.
It is understood that chief executive Alex Baldock and finance chief Jonny Mason, as well as public relations staff, reviewed the statement before it was published but did not see the error.
Russ Mould, investment director at AJ Bell, said: ‘This sort of mistake does not look good.
‘These are big, complicated businesses but many people would have looked at this statement before it went out. It could have been far worse but this is not really the sort of thing you want to see happening.’
Shares gave up their early gains after the clarification was published. But the stock later recovered – and closed 7pc higher – in a sign investors were more encouraged by signs of a turnaround in fortunes at dixons than worried about the mistake.
Analyst david Madden of CMC Markets said: ‘ Traders were clearly cautious going into the announcement as the firm issued a painful profit warning during the summer.’
dixons said that despite a drop in sales of mobile phone products, other electricals flew off the shelves over Christmas.
On top of this, dixons said it sold about 8,000 voice- controlled smart speakers every day.
Overall, like-for-like sales of electricals were up 2pc in the ten weeks to January 4, while mobile sales fell 9pc. A big boost came from online, up 7pc compared to the previous year.
Baldock said the company had a good Christmas. He also stuck to guidance saying that annual sales and profits were both set to grow, with adjusted profit expected to be about £210m. The business posted a half-year loss of £86m last month.
Its latest update came after a difficult festive period for retailers, with many big companies struggling in the face of falling visitor numbers to the High Street and brutal competition from online.
dixons has been slashing costs, closing poorly performing shops and revamping those that remain as part of a turnaround plan, and improving its online presence.
Mould added: ‘This update suggests solid progress is being made in almost all parts of the business. Sadly, the mobile arm continues to be a drag, and that’s partly down to consumer shopping trends.
‘The nation seems happy to load up on giant TVs and the latest gadgets, but there isn’t much excitement about having the latest handset. people are holding on to their phones for longer, which has been a growing problem for dixons, which relies on people upgrading handsets on a frequent basis.’ Nick Bubb, an independent retail analyst, added: ‘dixons Carphone must have been a prime candidate for a profit warning, but the company has wriggled off the hook, thanks to strong market share gains.’
Its shares rose 7pc, or 10p, to 152.45p yesterday.