Currys shares soared despite warning the rising cost of living would hit profits this year.
The electronics retailer said the outlook is ‘uncertain’ as households rein in spending in the face of higher energy and food bills.
Chief executive Alex Baldock acknowledged that shoppers are ‘hard pressed’.
Currys’ chief exec Alex Baldock said customers are spending more on technology than they would have before Covid struck, a trend he expects to continue
‘We are not expecting that to improve over the months ahead, so definitely discretionary income is squeezed.’
Currys said profits this year will drop to between £130million and £150million, down from the £164million analysts had pencilled in.
The group has lost 45 per cent of its value this year amid fears spiralling inflation will hit demand for big ticket items.
But shares yesterday rose 10.5 per cent, or 7p, to 73.55p.
Currys has seen shoppers flock back to stores in the wake of Covid lockdowns.
In-store sales jumped 61 per cent in the year to May from the same time last year – higher than it had expected.
Overall sales hit £10.1billion, a slight drop from £10.3billion last year. But profits rose 19 per cent to £186million.
Baldock said customers are spending more on technology than they would have before Covid struck, a trend he expects to continue.
He said: ‘This is a sustainably larger market, even after the turbulence of the past few months that remains true.
The market for technology is larger than it was before the pandemic because of the more important role technology plays in people’s lives.’
Currys, founded in 1884 by Henry Curry as a bicycle-building business, has 314 stores in the UK and Ireland selling computers, home appliances, games consoles and other electronics.
Its results came amid ongoing turbulence at rival AO World, which has seen shares fall 41 per cent since last Friday.
It was forced to tap shareholders for £40million of financing after a credit insurer pulled its cover.
Hargreaves Lansdown equity analyst Matt Britzman said: ‘On the one hand profits beat expectations as higher costs were successfully offset by cost savings across the business and the return of in-store shopping provided a boost to margins.
‘On the other hand, the outlook still looks murky as inflation looks set to impact discretionary spending and costs across the board are set to keep rising.’
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