DSG First-Quarter Sales Gain on World Cup Television Purchases, Apple iPad
DSG International Plc, the U.K.’s largest consumer-electronics retailer, reported an increase in first-quarter sales, boosted by the World Cup soccer tournament and the introduction of Apple Inc.’s iPad.
Revenue at stores open at least a year rose 3 percent in the 12 weeks through July 24, led by 6 percent growth at the company’s domestic unit, the Hemel Hempstead, England-based retailer said today. Same-store sales were unchanged in the Nordic region and fell 1 percent in the other international division, which includes Italy, Spain and Greece.
Chief Executive Officer John Browett said he remains “cautious” about the economic outlook as the retailer prepares for the peak Christmas selling period. DSG, which will be renamed Dixons Retail Plc this month, has refurbished stores, opened combined PC World and Currys outlets, and begun adding Phones 4U mobile shop-in-shops to attract shoppers.
“The U.K. has benefited from World Cup sales and the iPad launch,” John Stevenson, an analyst at KBC Peel Hunt, said in a report. “With a tougher consumer climate ahead, it is difficult to anticipate the shares making much progress over the next six months.” He doesn’t have a recommendation.
DSG shares climbed 0.49 penny, or 1.9 percent, to 25.85 pence at 9:15 a.m. in London trading. The stock has dropped 30 percent this year after almost tripling in 2009.
‘Cash for Goals’
DSG increased its share of U.K. spending on televisions to about 22 percent during the World Cup, when its ‘Cash for Goals’ promotion offered customers money back for each goal England scored in the tournament, Browett said on a call to journalists.
“We took most of the market growth, if not all of it,” Browett said.
Sales have weakened “a little bit” since the end of the period, the CEO said. The economic outlook is “not a normal market, but neither is it a disaster,” he said.
DSG was “bowled over” by consumer interest in Apple’s iPad, Browett said. The retailer has sold thousands each week and predicts it will be the most popular Christmas gift this year. 3-D televisions, the iPod Nano and connect gaming mean a “very strong” product cycle this Christmas, Browett said.
The iPad “has been a tremendous success. We’ve sold far more than we’d expected.”
DSG faces increased competition in the U.K, as Best Buy Co. opens stores in a joint venture with Carphone Warehouse Group Plc and supermarkets and Internet retailers offer more of its products such as DVDs and televisions.