Shares in Kesa Electricals fell more than 3.5 per cent this morning after the retailer that owns Comet in the UK warned that full year profits would come in at the low end of the City’s expectations.
As the FTSE 250 electricals retailer said sales at Comet had slipped by 2 per cent over the crucial Christmas trading period, some brokers began to mark down their forecasts - and investors marked down the shares.
After an hour’s trading today, Kesa was 9.5p - or 3.61 per cent - lower at 254p. This values the group at more than £1.35 billion.
Rhys Williams at Seymour Pierce cut his estimate for Kesa’s annual profits to £147 million before tax from the previous £154 million. Before today’s cautionary trading update from the retailer, the City’s consensus forecast had been for profits of just over £153 million.
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Kesa reports its results for the year to the end of January towards the end of March.
The profits caution at Kesa, led by chief executive Jean-Noel Labroue, came despite sales at the retailer performing better than it had expected over the festive trading period.
M Labroue said that “as predicted, this was driven by strong sales in new technologies whiles sales of the more traditional white goods continued to be weak”. Kesa said customers showed particular interest in flat-screen TVs.
But M Labroue added: “With our commitment to margin and cost management, we anticipate that overall the group will deliver results for the full year towards the lower end of current market expectations.”
Overall, excluding new store openings, sales at the group slipped by 0.3 per cent between the beginning of November and January 8, with the BUT stores in France leading the decline with a like-for-like sales fall of 8.6 per cent.
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Darty in France increased comparable sales by 2.5 per cent and Kesa described the performance of its other international businesses as “satisfactory”, with an “improved” performance in Holland.
Today’s grim news from Kesa follows yesterday’s update from DSG, the group formerly called Dixons that owns Currys, a competitor to Comet in the UK.
Against the underlying decline in sales at Comet, Currys posted a 3 per cent rise in like-for-like sales in the eight weeks to January 7.
For detailed information on Kesa shares click here