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OPINION

Why are Dixons Carphone shares down?

Why are Dixons Carphone shares down?
January 26, 2016
Why are Dixons Carphone shares down?

Over the 10 weeks ended 9 January, like-for-like sales grew 5 per cent with record sales over the all-important Black Friday bonanza and market share gains across all markets. In fact, sales were so strong that the group reckons pre-tax profits for the full-year will be ahead of current expectations. Things across the pond are also going well. A successful trial with US telecoms company Sprint has warranted a full joint venture to manage up to 500 stores across the US.

That all sounds pretty positive, so why did the share price fall? There are two possible explanations. First, there's some weakness across the Nordic regions. Like-for-like sales there grew 3 per cent during the period, but chief executive Seb James admits "pricing investment and currency devaluation" will have an impact on growth this year. Second, investors might be nervous about the property overhaul due to take place in the 2016-17 financial year. Following the merger of Dixons and Carphone Warehouse in August 2014, the new 3-in-1 store rollout has supposedly proved popular with customers. This means existing PC World and Currys stores will be merged, and a Carphone Warehouse inserted in-store. The knock-on effect means store estate numbers will drop by 134, but management insists employees should remain largely unaffected.