Electricals retailer Carphone Warehouse (CPW) Europe today increased expectations for full-year earnings per share (EPS) and EBIT growth following an “encouraging performance” by operations outside of the UK and increased consumer interest in smartphones and tablets.
In a trading update for its fourth quarter the company raised EPS estimates for 2010/11 from 13.5p-14p to 14.5p-15p, while it also predicts that it will deliver EBIT growth of between 15 and 20 per cent.
Like-for-like (LFL) revenues during Q4 fell by 1.7 per cent year-on-year, but CPW Europe said this was against tough comparisons from last year. LFL revenue growth for the full year currently stands at 0.9 per cent.
The group’s Best Buy Mobile US division has driven sales during the period, with Q4 connections up 25.9 per cent to 1.8 million, and it is this area of the business which the company is looking to significantly expand.
Best Buy Mobile, which had 190 standalone stores at the end of March, plans to end the 2011/12 financial year with approximately 325 standalone stores and to increase the total number of these outlets to between 600 and 800 within five years.
Roger Taylor, CEO of CPW Europe, said: “We believe we are well positioned to continue to capitalise on the rapid development and proliferation of smartphones and the ever-expanding range of tablets coming to the market, despite the uncertainty around the economic environment.
“The upgrades in EPS throughout the year have been greatly assisted by the strong performance of Best Buy Mobile US, which continued throughout the fourth quarter, reflecting its differentiated proposition and excellent operational execution.
“Full-year profits from Best Buy Mobile are now expected to be towards the top end of the £90 million to £100 million range.”
It is now a year since CPW began its joint venture with US electricals retailer Best Buy, and this division of the group, dubbed Best Buy Europe, has reportedly been trading well in the initial 12-month period since the partnership was formed.
Stores in Hayes and Bristol opened last month, adding to the six which were unveiled in 2010, and there are three more outlets scheduled to appear in the UK before the end of 2011.
Taylor added: “With eight ‘Big Box’ stores now open, as well as its online platform, Best Buy UK continues to deliver high levels of customer satisfaction and a differentiated service proposition.”
CPW Europe will publish its preliminary results for the year ending March 31st 2011 on Tuesday June 14th.