Kesa profit squeezed by Comet sales

ELECTRICALS retailer Kesa yesterday warned that profits would be at the lower end of expectations due to weaker sales at its UK chain Comet.

Total like-for-like sales for the period between 1 November and 18 January were down four per cent.

But Comet sales plummeted 7.3 per cent as tough competition, lukewarm consumer sentiment and poor weather took its toll.

Kesa said that the pre-Christmas snowfall in the UK and continental Europe during its key trading period, knocked at least two per cent off sales.

The company also said that sales had “softened” since the VAT rise to 20 per cent.

Kesa, which also runs market leader Darty in France, said it would respond to the challenges at Comet by cutting costs, improving its website and refocusing stores on its most profitable categories.

The retailer said full-year adjusted profit before tax would be towards the lower end of analysts’ forecasts range of €98 to €119m (£82m to £99.5m).

Chief executive Thierry Falque-Pierroton said there were no plans to spin off Comet or to switch the company’s listing to France, as had been suggested by analysts.

He added: “We remain confident in our strategy and committed to our plans to implement the Darty concept in all our markets and we have in place a number of additional measures to improve revenue and reduce costs.”

Matthew McEachran of Singer Capital Markets said: “Trade did pick up in the week after Christmas, once the snow melted.”