Dixons Carphone profits tumble as coronavirus closures hit bottom line

The electricals giant posted a 51% drop in adjusted pre-tax profit to £166m during the 53 weeks to May 2. 

On a statutory basis, Dixons Carphone narrowed its losses to £140m, compared with £259m a year ago, despite the costs incurred by closing its standalone Carphone Warehouse stores in the UK. 

In its core UK and Ireland division, Dixons Carphone recorded a 1% uplift in like-for-like sales and total revenue, although adjusted EBIT dropped 10% to £162m. 

Online sales jumped 22% across the year – rocketing 166% during April as the UK entered lockdown – but Dixons said profit declines were sparked by the store closures and costs relating to the coronavirus pandemic.    

The group’s mobile division in the UK and Ireland booked a £104m EBIT loss as sales fell 20%. 

Earlier this year, Dixons revealed plans to shutter its 531 standalone Carphone Warehouse stores, with the loss of 2,900 jobs. It is instead focusing on selling mobile phones through its larger ‘three-in-one’ stores. 

Dixons’ international operations registered an 8% increase in adjusted EBIT to £136m, as sales overseas advanced 4% on a like-for-like basis.

The group hailed market share gains of 0.5% in the Nordics and 0.4% in Greece. 

Dixons said coronavirus had made a “significant impact” and cautioned that “wide-ranging repercussions of the crisis will be felt for many years”. It warned that it could hinder consumer spending across all of its markets. 

The group did not provide profit forecasts for its 2020/21 financial year, but insisted it was “prepared for a range of economic outcomes”.  

Boss Alex Baldock said technology had played a “vital role” in helping people through the coronavirus crisis and said Dixons had “stepped up” to help its customers. 

He said its electricals businesses have continued to grow sales since the end of its financial year.

Baldock added: “Where our stores have reopened we’ve performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning.

“We’ve learned a lot during this crisis and will emerge a better business from it. We’ve pioneered new ways of shopping, empowered our colleagues to move faster and seen how technology is set to play an ever-bigger role in everyone’s lives. 

“We’re also more convinced than ever that Dixons Carphone has the right strategy for our customers, our colleagues and our shareholders in the years ahead.”