Dixons Pops 15% As Online Sales Go Through The Roof; Street Sees 10% Downside

Shares of Dixons Carphone spiked 15% as the electricals retailer’s booming online sales in the first half helped offset the impact of the pandemic-led store closures during lockdown periods.

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Dixons (DC) reported that its pre-tax profit in the first half ballooned to £89 million in the six months ended Oct. 31 from just £2 million pounds during the same period last year. Electricals online sales jumped 114% to £1.8 billion, while like-for-like sales of electricals rose 17%. Meanwhile, Dixons’ UK mobile revenue dropped 54% in the first half mainly due to standalone Carphone Warehouse store closures announced in March.

Overall, the retailer estimated that the pandemic-led store restrictions had a total impact of £155 million on profit before tax since the start of the COVID-19 outbreak. Dixons sells its electricals products in 932 stores and across 16 websites in eight countries. Its brands include Currys PC World and Carphone Warehouse in the UK & Ireland and iD Mobile in the UK, Elkjøp, Elgiganten and Gigantti in the Nordics, and Kotsovolos in Greece.

“Our UK stores were closed for months, but our colleagues adapted fast, continuing to help millions of people enjoy the technology that’s playing an ever-more vital role in their lives, and doing so safely,” Dixons CEO Alex Baldock stated. “We’ve grown sales and profits, preserving our market leadership while accelerating our transformation in the UK, and continuing to power ahead internationally.”

“The outlook remains uncertain, and we’re still nowhere near our full potential,” Baldock added.

However, Dixons disclosed that trading remained strong as electricals like-for-like sales in the six weeks to Dec. 12, climbed 16% year-on-year, despite extensive store closures in the UK and Greece. Online sales jumped 117% during the same period.

Last month, Citigroup reiterated a Buy rating on the stock with a 115p price target (7.6% downside potential). (See DC stock analysis on TipRanks)

For now, the stock scores a Moderate Buy analyst consensus based on 2 recent Buy ratings versus 1 Hold rating. With shares down 14% since the start of the year, the average price target of 111.67p suggests another 10% downside potential lies ahead over the coming 12 months.