European electrical retailer DSG International posted much better-than-expected Christmas sales, stoked by strong demand for large screen televisions, laptops and food mixers.
But in common with comments from a raft of other retailers the firm was cautious on the outlook for 2010.
"Looking forward, we expect 2010 to be tough across Europe and notably in the UK given the economic environment," said chief executive John Browett.
DSG, which runs the Currys and PC World chains in Britian and Ireland, said today sales at stores open at least a year increased 8 per cent in the 12 weeks to January 9th.
That compares with analysts' forecasts for an increase of 2-3 per cent, according to a company poll of analysts, and a rise of 1 per cent in the eight weeks to October 17.
DSG, which also runs UniEuro in Italy and Elkjop in Nordic countries, said gross margins were down 0.8 per cent, reflecting a strategy to drive sales through the peak trading period.
The UK and Ireland electricals division grew like-for-like sales 8 per cent in the period, while like-for-like sales in the Nordics region jumped 18 per cent.
However, like-for-like sales in the UK computing division fell 3 per cent, with the launch of Microsoft's new Windows 7 offset by continuing weakness in the business-to-business market.
"Customer response to Christmas and the Sale has been even better than we expected with strong demand across all the categories and countries," said Mr Browett.
Shares in DSG have more than doubled over the last year, outperforming a 41 per cent rise in the general retailers index.
The stock was up 2.6 per cent at 38.3 pence at 0806 GMT, valuing the business at £1.39 billion.
The firm is 18 months into a turnaround plan that focuses on cutting costs and stocks, selling-off underperforming businesses and revamping stores.
DSG said all its new format stores were delivering consistent gross profit uplifts and it was on track to deliver 50 million pounds of cost savings in its year to end-April 2010, as part of a 200 million pounds four-year cost saving plan.
Before today's update, analysts were forecasting a full year pretax profit of £60-100 million, according to Thomson Reuters I/B/E/S, up from £50.5 million in the previous year.
DSG added that it was entering into a period of consultation with its UK defined benefit pension scheme members to close the scheme to future accruals.
Reuters