Electronics giant Currys has delivered an optimistic trading update, raising its profit forecast for the year after reporting robust sales during the crucial festive period, even as consumers remain financially cautious.
Festive Performance and Regional Growth
The retailer announced that revenues increased by 6% over the ten weeks to January 10th compared to the same period last year. This growth was driven by a 3% sales uplift in the UK and Ireland, alongside a more substantial 12% jump in the Nordic region, where the company has been implementing strategic improvements.
AI Technology Drives Demand
Group Chief Executive Alex Baldock highlighted that artificial intelligence-powered products were a significant sales driver. Items such as robot vacuum cleaners and wearable technology experienced high demand, with smart glasses like the Meta Ray-Ban and Oakley Meta models seeing sales soar by an impressive 270%.
"Consumers are starting to find real utility in AI," Mr Baldock stated. "Currys is establishing itself as the home of AI in customers' minds – we've invested heavily in it."
Market Share Gains and Product Performance
Currys reported increasing its share of the broader market, benefiting from strong performances in mobile phones, computing, and domestic appliances. The company's mobile network brand, iD Mobile, grew its subscriber base by 19% year-on-year, while its technology repair service saw sales increase by 7%.
Consumer Caution and Economic Challenges
Despite the positive results, Mr Baldock acknowledged ongoing challenges in consumer confidence. He noted that spending has not returned to normal levels, with customers "hoarding cash" and saving more than borrowing, a pattern he described as unusual historically.
"Our technology market is down – it was down by 2% over the peak trading period in the UK, so we've had to run up and down escalators when it comes to growing in the UK, which we have done," he explained. "We can see that consumers are cautious... they're concerned about inflation and jobs and interest rates, and they're definitely in a cautious headspace at the moment."
Revised Profit Expectations and Market Response
Based on this performance, Currys now expects to report a pre-tax profit of between £180 million and £190 million for the full year. This represents an increase of up to 17% compared to the previous year and exceeds earlier market expectations.
The announcement prompted a positive market reaction, with Currys shares rising by approximately 5% in Wednesday morning trading. The company emphasised its focus on pursuing profitable growth opportunities that are not solely dependent on consumer spending patterns.
"It is not my job to wallow in gloom," Mr Baldock concluded, "and Currys is focused on finding new opportunities for profitable growth that don't depend on the health of the consumer."
