1/15/2009 10:39:00 AM
Carphone emerges relatively unscathed from Christmas
Carphone Warehouse claimed to have taken a 30% share of the Christmas mobile market, and appeared to cushion the downturn on the high street.
CEO Charles Dunstone had made market share the priority for the business in his previous briefing to the City, and appears to have succeeded on that front, and even bucked expectations from analysts pre-Christmas that share would come at the cost of a massive hit on margins.
Revenue from the retail business was just over £1bn, with Carphone’s traditional key metric for success – like-for-like revenues – down just 1% when the drop in the value of the British pound is factored in.
City analysts echoed Dunstone’s assessment that the marginal drop in revenue was very respectable given trading conditions over Christmas.
Dunstone said: ‘I regard these figures as a very creditable performance in an extremely challenging environment. We have grown our retail market share, thanks to great products, competitive pricing and an excellent effort by our people.’
Sales appeared to come from low-end £15-a-month tariffs and cheap prepay deals at one end, and expensive smartphones such as iPhones, Blackberrys and Nokias at the other end, with a slowdown in the mid-level handsets.
Mobile connections were up 3% to 3.7 million, but the rate of growth has slowed from the previous quarter when there was an increase of over 9%.
Margin was not as deeply impacted as many had imagined, allaying fears that Carphone could join others on the high street who have endured miserable Christmas trading.
Carphone had been heavily discounting some prepay handsets, and overlaying some contract deals with cheaper deals in bid to secure more customers.
Gross profit from the stores was down 3.7% (again, factoring the significant impact of the British currency in recent weeks), and Carphone said its margins would be down just 1.5%
In contrast one of Carphone’s main rivals, DSG, posted a 10% drop in sales from the same period the previous year.