Pan-European electrical goods retailer DSG International issued a second profit warning in three months this morning, saying it was having to cut prices to maintain sales, knocking its shares by 5 per cent.
The group, whose store chains include Currys and PC World in Britain and Ireland, said it now expected annual underlying profit before tax to be within a range of £200 million to £210 million sterling (€249.7 million to €262 million).
At a profit warning in January, DSG signalled underlying earnings would be around £250 million.
"The trading environment since we last reported has remained challenging across our markets, particularly in the UK, Italy and Spain," chief executive John Browett said in a statement.
"Whilst like-for-like sales patterns are broadly in line with those we reported over the Christmas period, it is clear customers have become increasingly promotion and deal-driven, impacting gross margins."
Like-for-like sales were down 1 per cent in the 25 weeks to April 5th, while like-for-like gross margins fell around 0.8 per cent in the period.
Mr Browett also said he would present on May 15th the first phase of a business review he had carried out since joining the retailer last September.
DSG said it had seen good demand in the UK and Ireland for flat-panel televisions, laptops, fridges, freezers and washing machines, particularly over Easter, thanks to promotions.
"However, demand outside of these promotions has been lower than expected, with a negative impact on margins," DSG said.
The retailer said that overall sales in UK computing remain disappointing.
Shares in DSG, which have underperformed the UK general retailers' index by around 35 per cent in the past 12 months, were down 5 percent at 61.75 pence at 7.27am, valuing the company at around £1.1 billion pounds.