British music and book store HMV Group today reported strong Christmas trading, dispelling fears that piracy would hit sales of DVDs and worries of a poor holiday sales period for booksellers.
The firm said group sales, stripping out the effect of new and closed stores, rose 6.4% in the five weeks to January 8 - more than double analysts' expectations of a 2 to 3% rise.
HMV, which also owns the Waterstone's book chain, said sales were led by CD albums by U2 and Scissor Sisters, the 'Little Britain' cult UK comedy DVD and the 'Himalaya' travel book by former Monty Python member Michael Palin.
HMV, which makes around 90% of its profits in the second half of the year which hinges on the crucial Christmas trading period, sounded a note of caution about consumer spending in the UK, but said it was comfortable it would hit forecasts for the year.
'Whilst trading at Christmas was strong, we take a cautious view of the outlook for the UK consumer economy but expect it to prove sufficiently resilient for us to meet our financial targets for the full year,' the firm said in a statement.
UK consumers have been reining in their spending as a series of interest rates, worries about pensions and a cooling housing market begin to bite.
HMV said it would accelerate the return of cash to shareholders through an increase in the dividend and a programme of share buy-backs 'as and when appropriate'.
The company reported pre-tax profits for the 26 weeks to October 23 of £13.3m sterling, up nearly a quarter on the year-ago period and in line with analysts' expectations.
