The management team of electricals retail group Dixons retail will feel satisfied with the success of its renewal & transformation programme this morning, after publishing vastly improving sales results.
Full-year sales for the 52 weeks ending April 28th 2012 dropped three per cent year-on-year for the owner of the Currys & PC World brands, but the group‘s performance improved significantly in the fourth quarter when underlying trading grew.
In the UK & Ireland like-for-like (LFL) sales increased eight per cent in the last 16 weeks of the year, while overall sales jumped five per cent compared to the final quarter in 2011.
Over the last few years Dixons has invested heavily in revamping its stores, improving its multichannel offer and launching its new customer service brand KnowHow, and after a prolonged spell of challenging trading conditions the changes appear to be paying off.
Sebastian James, CEO of Dixons, commented: “Our overall Group performance across the year has been slightly better than we anticipated.
“We saw a strong end to the year particularly in the UK and Nordics, and it is good to see the work that we have been doing to improve the ranging and service bearing fruit as more customers are choosing us over our competitors.”
Dixons will no doubt have benefitted from the troubles of it rivals over the last year, with Comet has continue to struggled in recent months even after it was purchased by private equity firm OpCapita for just £2, while at the end of 2011 US based retailer Best Buy closed all of its out-of-town big-box stores after failing to make a significant impact on the UK market.
Internet sales now represent 18 per cent of total trading across the Dixons group, and sales through its multichannel operations grew 30 per cent year-on-year during the second half and 16 per cent through the full period.
Gross margins were flat in the UK over the year, in line with expectations, however across the group they fell 0.3 per cent due to a decline reported by the businesses Northern European operations during the first half.
Full-year profit before tax, which will be announced in June, is now expected to be at the top end of expectations at between £65 million and £70 million, but the renewed Euro crisis in Southern Europe will be a challenge to trading going forward.
Its stores in Turkey, Greece and Italy posted a particularly weak end to the financial year with final quarter trading down nine per cent LFL.
James added: “The consumer environment remains uncertain in many of our markets and we continue to plan cautiously and manage costs aggressively.
“Overall, though, our business is in a strong position for the year ahead and we are looking forward to an exciting summer of sporting activities and celebrations.”