Dixons Carphone warns on profits as customers keep phones for longer

Signs display the logo of Dixons Carphone at the company headquarters in London

"Whilst this investment will cause a shortfall in profits for our phone business we do however expect overall profit in our core retail operations to be in line with past year supported by good progress in our UK & Ireland, Nordic and Greek electrical businesses", he added.

Profit before taxes will be between £360 million (approximately $450 million) and £440 million for the year through April 2018, said the largest retailer of electronics in the United Kingdom in a Thursday statement that was not scheduled. "Whilst this investment will cause a shortfall in profits for our phone business we do however expect overall profit in our core retail operations to be in line with past year supported by good progress in our UK & Ireland, Nordic and Greek electrical businesses, " he said.

Shares plummeted by 33% in early trading though they recovered part of the losses later and were 24% lower by mid-morning.

Seb James, chief executive, said: "Over the last few months we have seen a more challenging United Kingdom post-pay mobile phone market".

A weaker pound, caused by the vote to leave the European Union back in 2016, has caused the price of mobile devices to rise; customers, as a result, have been put off buying the latest handheld and are instead choosing to stick with their current device for an extra four to six months. Analysts had on average been forecasting a profit of £495m.

UK RETAILER Dixons Carphone issued a profits warning, blaming the expected dip on Brits" increasing resistance to pay premium prices for "flagship' smartphones. "We have seen an increased number of people hold on to their phones for longer".

Boss Seb James said Brexit-induced currency fluctuations "have meant that handsets have become more expensive whilst technical innovation has been more incremental".

Analysts said the fact the group was trading well in its electricals business, which sells more expensive items, suggested the problem had its roots in a lack of innovation in the mobile phone market. James also predicts strong sales figures for the Iphone 8 is released this autumn.

"We know that for half of the premium market, which is the bit that we like, the Apple base more or less rejected the iPhone 7", he said.

Related:

Comments

Latest news

Web host will turn over anti-Trump site visitor info to Feds
But DreamHost said the warrant was still too broad, as it could sweep in people who sent emails to disruptj20 addresses. A Washington, D.C., judge has turned aside First Amendment claims and ordered a web hosting company to give the U.S.

Terror threat cancels Rotterdam concert
By around midnight, the area was calm and police had lifted the cordon they earlier put up around the venue, the NOS reported. But there already were strong doubts on Thursday that he was in fact linked to the threat.

Trump voices optimism about North Korea
The Trump administration's rhetoric has been highly variable but Washington has said it would be open to dialogue if Pyongyang took steps to calm tensions.

DOJ Drops IP Log Request for Anti-Trump Protest Site
DOJ asked the court to reject DreamHost's challenge to its authority to get the warrant and compel the company to produce the information.

Other news