Dixons Retail PLC Wednesday lowered its fiscal-year earnings target amid a slump in consumer confidence, heightening concerns about the performance of key U.K. high-street chains.
Dixons Retail, which is the U.K.’s largest electrical retailer by market share, now expects underlying profit before tax, excluding operations in Spain, to be around £85 million ($136 million) for the year ending April 30, from a previous range of between £100 million and £110 million.
The owner of Currys and PC World said: “Since the announcement of the Group’s trading statement on January 13, as has been well documented, consumer confidence across a number of our markets has deteriorated, particularly in the UK and Ireland.”
Analysts had been forecasting profit of between £85m and £109m, with a consensus estimate of £105m.
The company said that sales at Dixons’ stores on the mainland UK and Ireland dropped 11pc in the 11 weeks to March 26.
The retailer also said it was considering getting out of the Spanish market, which would reduce its losses by £5m a year for the next two years.
Dixons shares saw a dramatic drop of 18.27 percent, interestingly followed by fellow consumer electronics retailer Kesa Electricals (Comet) with a decline of 5.34 percent. However other retail chains also suffered losses on the stock market at the same time largely due it would seem as Dixon’s being seen as a harbinger of doom for the high street retailers.