Currys cuts profit outlook again on Nordic woes

Electronics retail chain Currys has trimmed its profit guidance for the second time in just over three months, as trading woes in Scandinavia continue to affect the group.

It has hired a new chief executive of the Nordics business as it ramps up overhaul efforts for the division, where it admitted the performance remains “very challenging”.

Currys said the Nordics’ troubles were offsetting “strengthening” trading in the UK and Ireland and would leave profits sharply lower.

It said underlying pre-tax profits were now expected to be about £104 million, in line with recent cuts to the consensus in the market but at the lower end of previous guidance.

Shares in the group fell 4%.

Currys had downgraded its outlook last December to between £100 million and £125 million for the year to April 2023, from the £125 million to £145 million previously expected.

It will mark a steep fall from the £186 million in pre-tax profits it delivered in 2021-22.

Currys had also said just two months ago that it was “confident” of delivering profits in line with its December guidance despite the international woes.

The firm also warned it will end the year with higher debts, at up to £150 million from the previous guidance of less than £100 million.

Alex Baldock, group chief executive of Currys, said: “Our Nordics performance is not where we want or expect it to be.

“The intensity of competition may be unrelenting, but we’re no stranger to tough markets and aggressive competitors.

“We now need to go further and faster to improve our performance.”

It said Nordics chief executive Erik Sonsterud had left with immediate effect, to be replaced by chief operating officer Fredrik Tonnesen.

Mr Tonnesen joined the group in 2006.

The Nordics arm has been hit hard by a “tough consumer environment, high cost inflation and unrelenting competitive intensity”, according to the group.

The division saw sales slump by 10% over Christmas, whereas the UK and Ireland business pared back sales declines to 5% as it delivered a better-than-expected performance over the peak season.

Currys has already sought to turn around the Nordic arm’s fortunes since the start of the year, including cutting its head office and back office workforce by up to 15%, slashing spend on contractors and external consultants, and upping delivery charges.

Published: 16/03/2023 by Radio NewsHub