Marks Electrical Group PLC (AIM:MRK) shares have plummeted 20% after a profit warning, but there is "zero read-across" to AO World PLC (LSE:AO.) and Currys PLC (LSE:CURY), says analyst John Stevenson at Peel Hunt.
The Marks Electrical warning comes with sales declines in Q1 continuing across the first half and management speaking of tough market conditions, overlaid with increased operating and distribution costs.
Marks said this all combined to lower EBITDA guidance to £1.7 million for this year, versus consensus of £4.5 million.
"In our view there is zero read-across to Currys and AO, both of which reported strong sales in MDA [major domestic appliances] and wider electricals."
AO has just reported double-digit sales growth over the first half, while Currys reported UK & Ireland LFL sales growth of 3%, highlighting strong sales in large appliances and computing, offset by declines in TVs and airfyers.
"AO’s operating model benefits from the group’s scale, which Marks Electrical is currently struggling to build," the analyst said.