British retailer Kesa downgrades profit guidance
British retailer Kesa Electricals warned on Wednesday that annual profits will be at the low end of investor expectations due to wintry weather and increased competition in its major markets.
"Adjusted profit before tax (is) currently expected to be ahead of last year and towards the lower end of market expectations," the group said in a trading update.
Market expectations are currently for annual profit of between 98 million and 119 million euros.
Kesa said group sales on a like-for-like basis, stripping out the effect of new floor space, sank by four percent between November 1, 2010 and January 18, 2011.
The group, whose businesses include electrical retail chains Comet in Britain and Darty in France, said adverse weather conditions in major markets had hit sales by about two percent.
"Against a background of increased competitiveness, Darty France and the other established businesses delivered a robust performance, offset by softer trading at Comet and the developing businesses," chief executive Thierry Falque-Pierrotin said in the statement.
"We remain confident in our strategy and committed to our plans to implement the Darty concept in all our markets and we have put in place a number of additional measures to improve revenue and reduce costs," he added.
But Comet was expected to perform badly this year, partly because of the British government's recent VAT sales tax hike.
"Since the introduction of the VAT increase on 4 January we have so far seen sales trends soften," Kesa said.
"In the light of these factors we are now anticipating that Comet will deliver a small retail loss for the year."
© 2011 AFP