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Investing.com -- Currys reported a 3% increase in group sales over the first 17 weeks of its financial year, supported by demand for air conditioners, fans, and gaming products during a hot summer.
The British electricals retailer also announced the launch of a £50 million ($68 million) share buyback, starting immediately, following a previously declared £25 million cash dividend.
Shares in Currys were up 21% following the report as of 07:42 GMT.
In its largest market, the U.K. and Ireland, revenues rose 3%, with growth in AI computing offsetting weaker demand for TVs, tablets, and air fryers.
Sales in the Nordics were up 2%, driven by demand for robotic lawnmowers and vacuums.
"It’s been a good start to the year, with encouraging performance across the group," CEO Alex Baldock said in a statement.
"Our Nordics recovery continues to pick up pace. We continue to grow, improve margins and control costs well. We’re confident that profit margins will step forward again this year," he added.
Currys said it remains confident in future growth and is on track to meet market expectations for a 5% rise in annual profit to £170 million.
Longer-term guidance is unchanged, targeting a 3% adjusted EBIT margin, annual capex below £100 million, and exceptional cash costs of less than £10 million by fiscal 2027, with working capital at least neutral.
RBC Capital Markets analysts said Currys now has a stronger balance sheet, and with its pension review completed, it is able to begin share buybacks. However, they cautioned that the offer “remains fairly discretionary” and that the company’s low margins leave it “highly sensitive to any changes in the macro outlook for consumers.”
They also highlighted the risk that Currys’ capital expenditure may need to rise more than anticipated in the medium term to support expansion and improve service levels.
Prior to the update, the stock was trading at around 5x estimated enterprise value (EV) to EBIT for calendar year 2025 (CY25), or about 9.5x estimated price-to-earnings (P/E) for 2025, which RBC described as “reasonable but not in the bargain basement any more as it was in late 2023.”