Currys PLC (LSE:CURY) shares jumped 10% to 50p after chief executive Alex Baldcock said the retailer expects profits for the full financial year to be above consensus estimates.
In a trading update for the 10 weeks to 6 January, the electronics chain said it expects to record adjusted profit before tax for the current financial year of between £105 million and £115 million.
This would put it ahead of consensus forecasts that estimate it will achieve adjusted pre-tax profit of £104 million for fiscal 2023 to 2024.
The company said that it maintained "robust profits" through a stable gross margin and continued cost savings, and that its gross margin was "up strongly" due to better balancing of sales and margin.
Currys' like-for-like sales in the UK and Ireland dropped 3% during the peak trading period.
It also recorded a 2% drop in like-for-like peak sales in Norway, though it said that decline was offset to some degree by countries such as Finland.
Strong sales in mobile devices, which grew 29% year on year to 1.6 million subscriptions, were offset by weaker trends in TV and computing sales.
However, services had a 'strong' growth period, which Currys said drove growth in margins, partly through its Customers for Life loyalty scheme.
Credit adoption hit a record 20.6% among Currys customers and it now has 2.2 million customers in credit.
Baldock said: "We've had a successful peak trading period, for customers who are more satisfied than ever, and for profits and cashflow.
“Our markets may be no easier, but we now expect full-year profits to be above consensus expectations.”
The group said it expects to receive final clearances for the disposal of Greek electronics retailer Kotsovolos, which is expected to complete in the first quarter of 2024.
In the longer term, the group said it continues to target at least a 3% adjusted earnings before interest and tax (EBIT) margin with a focus on sustainable free cash flow generation, as exceptional cash costs "fall significantly" from 2024/25 onwards.
Scheduled pensions contributions will rise to £78 million for three years, up from £50 million in the fiscal year 2024/25, before a final payment is made in 2028/29.