Unlike a series of other retailers (including rival JB Hi-Fi (JBH)), consumer electronics group Dick Smith Holdings (DSH) seems not to have been hurt by the slowdown in consumer confidence post the 2014 budget announcement in May.
Or if it was, the company isn’t saying how much.
All it said yesterday in a trading update that it had beaten the sales guidance in its prospectus for last year’s public offering – by just $2 million.
That modest margin was perhaps why the shares rose by 1.5% to $1.96 yesterday.
Admittedly that was an out-performance in a market in the red all day and down 0.9% at the close.
But the close is still well under the issue price late last year of $2.20 a share.
Dick Smith forecast in its prospectus that sales for the 2013-14 year would be $1.226 billion.
The company said yesterday that sales for the year ended June 29 were $1.228 billion.
Australian sales rose 15% in the final three months of the financial year, with like-for-like sales rising 4% which is a strong result given the downturn, Dick Smith said yesterday.
DSH YTD – Dick Smith lifts sales, beats guidance
In contrast JB Hi-Fi trimmed its sales guidance back to 5.3% from a range of 6% to 8% because of the slide in consumer confidence and spending from May onwards.
"This improvement reflects the growth in our store network and ‘can do’ trading mentality," Dick Smith claimed in yesterday’s statement.
"This was achieved despite encountering challenging trading conditions, including further deterioration in Australian consumer sentiment, which has declined steadily since issuing the Prospectus.
"Dick Smith’s strong offers continue to resonate well with our customers and, combined with our trading capability, have allowed us to exceed our expectations of improved sales performance, particularly in the fourth quarter," the statement said.
As a result, Dick Smith reaffirmed its pro forma profit forecasts for the year ended June 29, 2014 with pro forma earnings before interest, tax, depreciation and amortisation of $71.8m and pro forma net after tax profit of $40m.
Dick Smith said it will report its 2014 results on August 19.
In a presentation to be made in Asia this week, CEO Nick Abboud said 5% of second half sales were made on line (around $25 million), with the target to grow that to around 10% over the next three years.
