drty15 Sep 2014 20:48
Improved like-for-like sales, including continuing outperformance in France, showed European electronics retailer Darty was fighting hard to counter tough consumer conditions in its markets.
The FTSE Smallcap group, which has roughly 400 stores in France, Belgium, the Netherlands, the Czech Republic and Slovakia, grew group sales 5.9% in the four months from 1 May, with like-for-like (LFL) sales up 1.7%.
Despite the country’s travails, France has been a strong market for Darty, and this continued with 7.1% rise in revenues, helped by the recent acquisition of leading French website Mistergooddeal.com, and 2% LFL gains.
This, plus gross margins falling 70 basis points overall, was behind some analysts' forecasts and was behind the lower share price on the morning of results.
Chief executive Régis Schultz said: "During the quarter we continued to see the benefits of our '4Ds' plan to Drive trading, Digitalise Darty, Develop the brand and Deliver cost savings. We gained further market share and benefitted from very positive Vision sales ahead of the football World Cup.”
He pointed to a growing market share in France with continued strong performance as first franchise stores were rolled out, with the use of Darty's infrastructure for Mistergooddeal.com also increasing market share of the low price/low service segment of the market.
“While we are cautious in our view of the markets, our plans for the peak period put us in a good competitive position for the coming months,” he added.
Broker N+1Singer said the lower performance principally reflects the effects of a cooler summer and lower sales of refrigeration and air-con products compared to the same quarter last year.
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