Dixons Carphone Plc (LON:DC.) is set to report a slump in full year profits on Thursday but the FIFA World Cup could provide a much-needed boost to sales.
The retailer warned in May that its headline pre-tax profit for the 2018/19 financial year will fall by 21% to £300mln.
It blamed a shrinking market for the electrical goods market and cost increases from higher minimum wage requirements and a rise in import prices following the UK’s vote to leave the European Union.
New chief executive Alex Baldock said his predecessor Sebastian James had been too “short-termist” and “inwardly focused”.
He pledged to take action by shutting 92 Carphone Warehouse standalone stores this year to adapt to a shift in consumer habits towards online shopping and address rising costs.
However, his plans to overhaul the group hit a snag after it revealed on 13 June that millions of its customers had their card and personal details hacked.
The firm said it had launched an investigation after hackers accessed the credit and debit card details of 5.9mln Currys PC World and Dixons Travel customers along with the personal details of a further 1.2mln.
On the upside, the company has said that it expects an earlier Easter, the new Samsung phone and a promotion around the World Cup to lift sales. It estimates a 4% increase in like-for-like sales for the year.
Since the group has already provided guidance for the full year results, analysts at Deutsche Bank think it will be a “non-event from a numerical perspective”.
Instead, they believe the focus will be on whether Baldock makes any further comments on his cost-saving plans but they don't expect a more detailed update until December.
George Salmon, equity analyst at Hargreaves Lansdown, said Dixons' margins were “heading south”, which could be difficult to improve while under pressure from online retailers like Amazon.com (NASDAQ:AMZN).
Bank of England 'half as likely to hike rates as England winning World Cup'
Much like Dixon Carphone’s results, the Bank of England’s latest policy decision is likely to be a non-event with economists expecting the central bank to leave interest rates at 0.5%.
The market will be looking for any hints from the Bank on when the next rate hike will come.
Hargreaves Lansdown said the rate decision is expected to be "a bit of a damp squib" with markets now pricing in a 3% chance of a hike, making it "about half as likely as England winning the World Cup", based on current odds.
"A slew of weak economic data has quashed the chances of a June rate rise," said Hargreaves Lansdown senior analyst, Laith Khalaf.
"Even a recent spike in retail sales, prompted by the Royal Wedding and a spot of sunshine, is unlikely to prompt the Bank of England to change tack when the latest reading of the UK economy shows it’s limping along very slowly indeed.
"Markets think there will probably be a rate rise by the end of the year, though expectations have been reined back significantly, and there is now a good chance rates will stay on hold."
Significant announcements expected:
Bank of England interest rate decision
Finals: Dixons Carphone Plc (LON:DC.)
Interims: Chemring Group PLC (LON:CHG)
Trading update: Saga PLC (LON:SAGA)
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