DSG's better sales trend improves outlook for Xmas

DSG International, Europe's No 2 electricals retailer reported a pick-up in sales in recent weeks helped by store upgrades and demand for Microsoft's new Windows 7, giving it confidence for Christmas.
DSG, which runs the Currys and PC World chains in Britain, said on Thursday sales at stores open at least a year fell 4 percent in the 24 weeks to Oct. 17, but were up 1 percent in the last eight weeks of the period. "This trend was continued...which puts us in a good position," Chief Executive John Browett told reporters.
He expects strong sales of laptops and notebooks, large screen televisions and food mixers this Christmas. "People are still economising on going to eat out so the sale of Kenwood Chefs has been fantastic," he said.
His comments chimed with the latest Confederation of British Industry data which said British retail sales rose at their fastest pace in two years in November..
Analysts at the company's joint house broker Citi said pretax profit consensus for DSG's year to end-April 2010 was likely to rise about 20 percent to 65-70 million pounds, up from 50.5 million pounds in the previous year.
The shares rose 2.2 percent to 37.4 pence at 1055 GMT, valuing the business at about 1.3 billion pounds. Over the last 12 months the stock has more than trebled in value, outperforming the general retailers index by over 100 percent. DSG shares slumped by up to 90 percent last year on fears the firm might breach banking agreements, but it raised 300 million pounds ($500.3 million) in a share sale earlier this year and renegotiated its borrowing. DSG's Browett remained cautious about the outlook for 2010.
The firm, which also runs UniEuro in Italy and Elkjop in Nordic countries, said on Thursday it made a first-half underlying pretax loss of 17.6 million pounds ($29.4 million), beating analysts' forecasts for a loss of 24-35 million pounds. The group is one-and-a-half years into a turnaround plan that focuses on cutting costs and stocks, selling off underperforming businesses and revamping stores.