Carphone Warehouse posted a better-than-expected like-for-like sales fall of 2% in Europe in the first quarter to June 30.

The mobile phone retailer said that like-for-likes in the UK were positive but was undermined by a weak prepay market across Europe.

Carphone said the performance in the UK was helped by “successful smartphone promotions” including the launch of its weekly Smart Deal.

The 2% fall compared favourably to a company poll which had forecast a 5.5% sales fall and a 5.5% fall in the fourth quarter of 2011-12.

The retailer said: “Successful smartphone promotions have helped to drive positive like-for-like postpay sales growth in our key UK market. This was achieved by launching our weekly ‘Smart Deals’, designed to provide the best value in the market in the all important postpay smartphone segment.

“Although the prepay market remains weak, we have reason to be more optimistic about the increasing availability of lower priced prepay smartphones as the year progresses.”

The company expects the consumer environment in Europe to “remain challenging” due to the continued effect of regulation and competition in the mobile market.

Carphone said it is exploring opportunities to gain further scale in European markets it already exists in.

Carphone Warehouse chief executive Roger Taylor said: “We reiterate the guidance we provided in June when we presented our final results for 2011-12 and there have been no significant changes since then.

“At that time we said that CPW Europe was ideally placed to service the complex postpay market, and this remains the case. Our recent offers and new initiatives have already seen positive results across the business, and we are maintaining excellent customer service scores.”

He added: “As anticipated, the prepay market continues to be weak, but we remain confident in our opportunity to reinvigorate this market by driving smartphone penetration into this segment, particularly in the second half.”