A recent solid run for Currys’ shares had suggested the electronics retailer was moving towards a better place, supported by a resilient balance sheet.
That optimism is punctured by today’s first half results which are accompanied by the bad smell of a profit warning.
Currys’ international business is taking a big hit. If people sometimes forget the company has a large overseas presence, they got an unwelcome reminder as margins in Scandinavia and southern Europe come under serious pressure.
AJ Bell’s Russ Mould said: “For now, Currys is guiding that this is a short-term issue as rivals sell off heavily discounted excess stock, however the market may remain sceptical of a recovery in this part of the business until it has seen evidence of improvement.
“The difficulties abroad detract from what is a solid showing for its UK and Ireland operation. Though sales have continued to decline, Currys has been able to take some costs out of the business and, in contrast to its overseas arm, protect margins.
“Currys benefited from people buying laptops and other electronic goods during the pandemic but recent pressures on consumer spending and the fact that much of this earlier spend is unlikely to be repeated in the near term have clouded the outlook for the company.
“Management now have the challenge of steering the business through a consumer recession in the hope they can come out the other side as a leaner, more efficient operation with an improved market share as less robust rivals fall by the wayside.”