Electrical retailer DSG International PLC (DSGI.L) Thursday reported growth in underlying sales and like for like sales for the the 12 weeks ended January 9, as it witnessed huge demand for televisions and personal computers over the Christmas period. In a trading update, the company said during the period its underlying group sales, which exclude sales from closed businesses and discontinued operations, grew 11% in sterling, and like for like sales rose 8%.
However, gross margins across the group were down 0.8% year on year, driven by the group's decision to drive sales through the peak period, as well as product and market mix.
In UK & Ireland, underlying sales advanced 3% and like for like sales grew 5%. At UK & Ireland Electricals, both underlying sales and like for like sales increased 8%.
At UK Computing, underlying sales dropped 8% and like for like sales slipped 3% during the period. The company noted that the segment benefitted from the launch of Windows 7, but overall sales were held back by continuing weakness of the B2B market.
The operator of Currys and PC World chains experienced record-breaking Christmas in the UK in key categories such as TVs, PCs and White Goods. According to DSG, a computer and a TV were sold every 2 seconds over the Christmas period. All the megastores saw sales over GBP 1million each in the first week of the sale.
In Nordics, a 40% growth was registered in underlying sales, and like for like sales witnessed an 18% rise. Other international operations recorded 1% rise in underlying sales and 5% increase in like for like sales. E-commerce underlying sales grew 16% and like for like sales added 15%.
DGI said it is on track to deliver GBP 50 million of cost savings this year, as part of the GBP 200 million 4 year cost saving program.
According to John Browett, Chief Executive of the company, "Customer response to Christmas and the Sale has been even better than we expected with strong demand across all the categories and countries. This performance reflects the benefits of the actions we are taking to revitalise the business as part of the Renewal & Transformation plan, with particularly pleasing performances in our Megastores and 2-in1 stores.''
Looking forward, the retailer expects 2010 to be tough across Europe and notably in the UK due to the economic environment. "However, we expect to continue to benefit from the self help of our Renewal & Transformation plan and continue to build solid foundations for future growth," Browett added.
UK retailers in general have had a good period over Christmas. The British Retail Consortium said early this week that December retail sales jumped 4.2% from a year earlier, marking the strongest growth in eight months. Supermarket chain Tesco Plc (TSCO.L) said Tuesday that group sales rose 6.9% at actual rates during the six weeks to January 9. J Sainsbury plc (SBRY.L) said last week that its third-quarter sales increased 6.2%.
DSGI.L is currently trading at 37.92 pence, up 0.39 pence or 1.04%, on 3.26 million shares.
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