The Currys PLC (LON: CURY) share price edged higher for the second day after releasing its latest trading update for the various regions it serves. The company noted that UK & Ireland like-for-like revenue was down 2%, the Nordics like-for-like revenue was down 8%, and the Greece like-for-like revenue was up 3%.1
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The decline in the Nordics’ region like-for-like revenue was highlighted as a critical factor behind the company’s poor performance as it has since scrapped its dividend payout and is currently engaged in multiple cost-cutting measures that should benefit the company over the long term.
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Currys highlighted that as disposable incomes are squeezed by record-high inflation, consumers are rethinking whether they should invest in computers and gadgets amidst a cost-of-living crisis, leading to lower sales in these two categories.
Nonetheless, the company reported a boom in domestic and mobile goods sales, which was insufficient to compensate for the decline in computer and gadget sales. However, the company maintained its full-year guidance, announcing a 25% decrease in capital expenditures to save costs.
Currys had a long history of success in the Nordics region, which is its second-largest, but this has suddenly ended, as evidenced by the 8% decline in like-for-like sales during the 17 weeks to 26 August 2023. This region is crucial to the company’s overall success but is extremely tough and overstocked.
The group’s main attraction is its omnichannel business model. You can enter a store and access the entire online shopping range or speak to an in-store expert from the comfort of your home. These services help Currys attract and retain customers once they’ve made contact.
However, Currys stores have been outperforming its online sales, most likely due to the personal touch of in-store shopping. The group’s service channels have also stood out. Services usually have higher margins than goods sales, which could relieve some pressure from the group’s declining revenues.
Currys’ cost-saving measures are also critical in boosting its finances as it expects to deliver a further £110m in savings during the current fiscal year. The company is also actively reducing its capital expenditures, which is not sustainable over the long term, as it will have to invest for future growth later.
Currys share price.
The Currys share price edged higher for the second day after its latest trading update was released.
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