Consumer confidence will hit Dixons and Kesa
ELECTRICALS giants Dixons and Kesa report their full year results this week against a grim backdrop of dwindling consumer confidence.
The companies have seen households cut back on so-called “big ticket” items like washing machines and TVs, leaving them struggling to generate sales.
Dixons, to report on Thursday, is in the throes of a £50m cost-cutting campaign in an effort to turn the business around. Sales of £8.39bn – a drop of 1.68 per cent year on year – are forecast at the retailer which is pinning its hopes on booming sales of Apple’s iPad 2.
A pre-tax profit of £86.5m is expected – down by 4.42 per cent – at the business which has been struggling in the UK.
Keith Bowman, head of equities at Hargreaves Lansdown said: “An emphasis on the group’s recently launched service brand ‘Knowhow’ is likely.”
Meanwhile Kesa, which owns Darty in France as well as Comet in the UK, will announce its results on Wednesday.
Sales of £5.49bn are forecast – up 2.4 per cent year-on-year with pre-tax profit of £82.34m pencilled in. That represents a rise of 0.5 per cent. Struggling Comet is being shaken up by investor Knight Vinke.
The chain plans to cut annual costs by £10m by consolidating 14 regional service centres to two sites, reducing its warehouse network from three to two and cut head office staff.
In Dixons’ most recent update, sales for the UK were down five per cent in the year to 30 April, including an eight per cent slump in the second half of the period.
The company, which has 1,200 stores in 28 countries, has issued two profits warnings this year.