UK’s Dixons sees year profit at bottom end of hopes

Dixons Retail, Europe's No. 2 electricals retailer, forecast full-year profit around the bottom end of market expectations after Christmas sales in the UK were hit by December's adverse weather.
The company, which runs the Currys and PC World chains in Britain, UniEuro in Italy, Elkjop in Nordic countries and Kotsovolos in Greece, said on Thursday it expected underlying profit before tax in the range of 100 mln pounds to 110 mln pounds in fiscal 2011.
Dixons said sales at stores open over a year fell 2% in the 12 weeks to January 8, its fiscal third quarter. That compares with analyst forecasts for a fall of 2 to 9%, according to a Reuters poll, and with a second-quarter fall of 1%.
Gross margins across the group were down 0.2%.
"We remain cautious about the economic outlook across our markets," said the firm.
Dixons, which makes all its profit in the second half, is two and a half years into a turnaround plan that has focused on selling underperforming businesses, cutting costs, revamping stores, opening larger stores and improving product ranges and service.
The programme has generally been well received by analysts, but Dixons' share price has fallen by 40% over the last year.
Investors are concerned about macro-economy headwinds, competition from supermarkets and pure-play internet retailers, and the arrival in Britain of U.S. electricals No. 1 Best Buy.
The stock closed at 22.7 pence on Wednesday, valuing the business at 820 mln pounds.