Carphone Warehouse says outlook good despite sales fall

Carphone Warehouse has blamed tough trading on the high street for the retailer connecting fewer mobile phone customers than expected over Christmas.

The group reported an 11 per cent rise in subscription connections, lower than the 15 per cent pencilled in by the City.

Mobile phone sales also grew less than expected in the third quarter. Revenue rose 13 per cent to £650m, against forecasts of 15 per cent. Like-for-like retail sales rose 1 per cent. Shares slipped 1 per cent yesterday – down 2.75p to 302p.

The company did not provide figures on the performance of its exclusive contract to sell Apple's iPhone but it is believed to have added footfall to its stores.

There was good news on broadband growth with the division adding 118,000 customers taking its total base to 2.6 million. Despite significant numbers of TalkTalk customers coming out of their initial 18-month deals, Carphone said it saw no increase in churn levels.

Founder and chief executive Charles Dunstone said the company was well positioned as a group, "despite the more uncertain consumer environment". Finance director Roger Taylor said outlook for the current and following year was unchanged. "Overall for the quarter, in a quite challenging retail environment, I think we did pretty well," he said.

The company is expecting to deliver sales of £1.3bn and pre-tax profits of £220m to £225m in the year to March, compared to £123m last year.

Richard Hunter, at Hargreaves Lansdown Stockbrokers, said: "The broadband offering is clearly beginning to maintain momentum, whilst the sales of the Apple iPhone, whilst not confirmed, are expected to have had both direct and indirect benefit from more people visiting its stores.

"The number of connections for the period has missed expectations although full-year figures are reportedly on track."

In the US, Carphone said its mobile retail venture with Best Buy was progressing well. By the end of the period it was present in 181 Best Buy stores as Carphone remains on track to cover the entire US portfolio by the end of 2009.