Currys warns of profit – London Business News

A recent solid run in Currys shares had indicated the electronics retailer is moving towards a better position, supported by a resilient balance sheet.

That optimism is punctuated by today’s first-half results, which are accompanied by the rank smell of a profit warning.

The international business of Curries takes a big hit. If people sometimes forget that the company has a large presence abroad, they have been unwelcomely reminded that margins are coming under serious pressure in Scandinavia and southern Europe.

AJ Bell’s Russ Mold said: “Currys currently believes this is a short-term issue as competitors sell heavily discounted overstock. However, the market may remain skeptical of a recovery in this part of the business until it sees evidence of improvement.

“The difficulties abroad detract from the solid performance of the UK and Ireland office. Although sales have continued to decline, Currys has been able to take some costs out of the business and protect margins, unlike its overseas arm.

“Currys benefited from people buying laptops and other electronic goods during the pandemic, but recent pressure on consumer spending and the fact that much of that past spending is unlikely to be repeated in the near future has clouded the company’s prospects .

“Management now faces the challenge of leading the company through a consumer recession in hopes that it can emerge as a leaner, more efficient operation with an improved market share on the other hand if less robust competitors are left behind.”