Shares in Britain's biggest electronics retailer Dixons have fallen 20% after the company admitted trading in the Christmas period had been weaker than expected and full year profits would miss expectations.
Dixons has over 10 stores in Ireland, including 5 Dixon stores, 4 Currys and 2 PC World outlets.
It said today that sales in Ireland last year grew by 5% to £25.5m, but like for like sales were 3% lower due to the slowdown in the Irish economy.
Dixons recently opened a Currys and PC World outlet in Limerick.
In a statement that shocked the stockmarket Dixons said like-for-like sales rose just 1% in the eight weeks to January 4, and were flat in the UK amid weaker sales of games consoles, audio products and extended warranties.
'Trading in the UK over the Christmas period has been below our forecasts,' Chairman John Collins said in a statement. 'With an increasingly uncertain economic outlook and consequent risk to consumer confidence, we are cautious about the near term outlook for our markets. We therefore expect that the results for this financial year will be below current market expectations,' he added.
Analysts had been expecting Dixons to make a pre-tax profit of £328.5 million sterling in the year ended March. Dixons' profit warning will confirm analysts' worst fears that UK consumer spending is flagging, and that retailers are only maintaining sales by cutting prices.
Dixons said profit before tax rose 8% to £94.8 million in the 28 weeks to November 9, at the top end of analysts' forecast range of £89-96 million. But it also said gross margins in its main UK retail division fell a larger-than-expected 0.9 percentage points and that this decline had accelerated since then due to lower sales of extended warranties and lower mobile phone margins.
Dixon's shares slumped in November when it warned profits on extended warranties would be hit by £20 million after the closure of a tax loophole in the 2003-4 financial year. The stock has underperformed its UK retail peers by 10% over the past three months.
