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Crappy Christmas! Dixons Carphone dials back profit expectations

It woz Brexit and 'cautious consumers' wot done it

By Paul Kunert

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Dixons Carphone has slashed full-year profit estimates amid continued downward pressure on mobile phone margins over the Christmas quarter and "more cautious consumer" spending in the UK.

In a Q3 trading update, DixCar confirmed group revenue was up 4 per cent year-on-year during the 10 weeks to January fuelled by trade in Greece and the Nordics, which were described as "stars of the show" for 23 and 11 per cent sales hikes.

Outgoing CEO Seb James, who is leaving the company after six years at the helm, said he was "satisfied" with sales in Blighty.

"In UK&I electricals, our Boxing Day sales did not quite mirror the promise of our very strong Black Friday week, but we are very confident that we grew market share in pretty much every category," he said in a prepared remark.

Dixons Carphone shipped one in three SIM-free phones in the UK during the period and local sales were boosted by better iPhone X availability. But competition ate into profits as more telcos directly targeted customers instead of using a dealer network.

"Current market conditions means that gross margins continue to be challenged in phone," James said.

Full-year profit before tax is now projected to cross the finishing line at between £365m and £385m, clipping the previous guidance of £360m to £400m.

Dixons warned of falling profits at the half-way stage of the financial year when it said some customers were skipping smartphone upgrades due to the rising cost of handsets after the EU referendum and no new advances in tech.

James, who took control of Dixons during some choppy times following the credit crunch, confirmed he is leaving to run pharma retailer Walgreens Boots Alliance later this year. He is to be replaced by Alex Baldock. ®

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