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UK retailer Currys warns on profit as Nordic chill sweeps in

by Staff GBAF Publications Ltd
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By Aby Jose Koilparambil

(Reuters) -British electricals retailer Currys cut its full-year profit forecast on Thursday after heavy discounting by rivals in the Nordics region drove it to a first-half loss, sending its shares as much as 10% lower.

The company, which makes most of its money in the second half of the year, said sales in the first six weeks of that period were similar to the first half – signalling a slow start to the key Christmas season.

Consumers across Europe are grappling with soaring prices of everything from fuel to food, and analysts fear retailers like Currys that sell big-ticket items such as TVs, mobile phones and washing machines could suffer as shoppers focus on the basics.

Currys, previously known as Dixons Carphone, said it now expected full-year profit to be between 100 million and 125 million pounds ($124-$155 million), down from a previous forecast of 130-150 million pounds.

“There are pockets of hope, particularly in the UK business, although the timing of a normalisation in the Nordic markets is difficult to predict,” said interactive investor analyst Richard Hunter.

Currys said like-for-like sales fell 8% in the six months ended Oct. 29 and total revenue dropped 7% to 4.48 billion pounds. It made an adjusted pretax loss of 17 million pounds.

The Nordics, led by Sweden and Norway, accounted for 42% of overall sales and saw a 95% plunge in adjusted operating profit, compared with a 25% rise in the UK and Ireland.

Chief Executive Officer Alex Baldock told journalists that some competitors in the Nordics were holding excess stocks and slashed prices to clear them.

The company booked a 511 million pound non-cash, goodwill impairment related to its creation from the merger of Dixons and Carphone Warehouse in 2014.

($1 = 0.8074 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu)