Currys has welcomed an “encouraging” performance over the past year but warned that earnings will fall next year as it faces greater inflationary pressures.
The electronics retailer reported an increase in adjusted profit before tax to £186m for the year ended April 30, compared to £156m a year earlier.
Currys told investors it was boosted by £69m in savings over the year through cost cutting.
This helped offset around £50m of cost inflation in running the stores, with a particularly large jump in energy.
The electronics retailer expects profits to fall to between £130m and £150m in the new financial year on “the current economic outlook and inflationary headwinds”.
It said inflation was “very likely” to put pressure on consumer spending and “affect sales, particularly in some of our more discretionary categories.”
Currys said it will therefore double its customer offering and prices, with an expanded range of products at lower prices.
It added that its large market share will allow it to weather inflationary pressures and weakness in consumer sentiment more easily than some peers.
“As a result, we will use the expected market weakness as an opportunity to gain market share and create long-term value,” says the group.
Meanwhile, total sales for the year fell 2 per cent to £10.1 billion, while sales in the UK and Ireland fell 3 per cent.
The group’s store sales rose 24 percent as the company benefited from loosening pandemic restrictions, although this was offset by a slowdown in online demand.
Currys Group Chief Executive Alex Baldock said: “These strong results demonstrate the critical role technology plays in millions of lives and that more and more customers are turning to Currys to enable them to fully enjoy this technology.
“A stronger business enables us to help customers through the cost of living crisis.
“Our scale as a global leader, cost control and strong relationships with suppliers will allow us to weather inflationary headwinds and keep amazing technology within everyone’s reach even now. That’s what Currys does and it’s never been more important. “
https://www.independent.ie/business/world/profits-to-drop-at-currys-as-inflation-to-weigh-on-customer-demand-41820624.html Profits at curries will fall as inflation weighs on consumer demand