Sales at Comet stores open at least a year dropped 15 percent in the three months ended April 30, the London-based retailer said today. That was worse than the previous quarter’s 7.3 percent drop and the average estimate of four analysts compiled by Bloomberg News of an 11 percent decline. Sales also worsened in Spain, the company said.
Comet’s same-store sales will continue to fall in the year to come, Chief Executive Officer Thierry Falque-Pierrotin said on a conference call today. The 248-outlet chain is struggling to arrest the decline in revenue as U.K. consumers defer spending on major purchases. Kesa also owns the Darty chain in France, its largest unit, where revenue rose 7.6 percent in the quarter.
“U.K. trading deteriorated significantly since early January,” and Spain showed a similar decline, Matthew McEachran, an analyst at Singer Capital in London, said in a report to clients.
Kesa rose as much as 1.9 percent to 139.9 pence and was up 1.5 percent as of 9:32 a.m. in London trading, reversing a drop of as much as 3.1 percent earlier in the day.
Kesa, which Sky News reported on May 9 may receive takeover bids from leveraged buyout firms including PAI Partners, said the U.K. market is becoming more price competitive, with customers shifting toward online purchasing.
Comet is accelerating a store refit program, adding more small, domestic appliances and expanding its Web offering to compensate for the slowdown. The chain lost its U.K. managing director a week ago when Hugh Harvey resigned.
“We know the first quarter is going to be tough,” CEO Falque-Pierrotin said on the call. “Turning around a retail company takes time. You can’t do it overnight.”
Kesa said adjusted pretax profit for the year will be “in line” with average analyst estimates. The retailer said in January that earnings would be at the lower end of estimates.
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