Dixons first-quarter like-for-likes rise: what the analysts say

“Dixons Carphone has recorded a solid performance in its first quarter, even against tough comparatives, with group like-for-like revenue up a healthy 4%. Its UK & Ireland like-for-like revenue is also up 4%.

“In a positive sign both for Dixons Carphone and the wider retail market, chief executive Sebastian James notes that it has seen no impact of Brexit on consumer behaviour to date. This is perhaps surprising for an electricals retailer selling primarily big ticket goods.

“How long this trend will last remains to be seen, with any hit in consumer confidence likely to impact willingness to spend on retail sectors like electricals first.

“Going forward, Dixons Carphone will face two important challenges despite its recent strong trading; managing any Brexit impact – both in the UK and the potential knock-on effects on its wider European markets – while simultaneously coping with the growth of rivals such as AO.com and Amazon in its core electricals categories.” – Michael Coombs, Verdict Retail

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“We would summarise the tone of the first-quarter conference call as confident but not complacent. Consumer behaviour appears not to have been adversely impacted by Brexit, and the company is setting up for a big Black Friday and Christmas peak.

“Despite ‘a bit of moaning and groaning from suppliers’, there appear to be no undue pricing pressures in the pipeline. Pricing remains competitive in the UK, [and] has now been brought into a similar position in Nordics and Net Promoter Scores are at all-time highs in both Dixons and Carphone warehouse.” – David Jeary, Canaccord Genuity

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“International continues to take market share. Nordics performance was steady with consolidation remaining a theme. Greece’s strong performance was helped by a very hot summer (and strong aircon), and weak comparables given last year’s riots.

“The electricals business is much better positioned in the event of a consumer slowdown after a near-decade of restructuring has reduced significantly the level of operational gearing in the business with demonstration of self-help measures, stability within mobile and visibility on Carphone Warehouse likely to be positive catalysts for the share price.” – Alistair Davies, Investec

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“Dixons Carphone remains very competitive on pricing relative to Amazon and AO.com, is pleased with customer satisfaction levels and growing market share in all regions.

“The company will continue to disclose the impact on UK LFL of the store integration programme, with the impact potentially building as the year progresses.

“Management is very pleased with the look and performance of new stores. In product terms, management is most excited by the latest HDR TV ranges and the potential for Virtual Reality to boost gaming-related areas. Mobile phone power bars are growing strongly on the back of the Pokémon GO craze.” – Scott Ransley, Dixons Carphone