Marks Electrical reduces profit guidance despite sales rise

In a trading update for the nine months to December 31, 2023, Marks Electrical sales increased 22% to £88.9m, while sales in the three months to December grew 17.8% to £35.1m.

The retailer grew market share in major domestic appliances and consumer electronics markets, but said gross product margins did not increase as per expectations, which has left “a material impact on our full-year profit guidance.” 

Marks Electrical said it expects full-year revenue to be in the range of £115m-118m, with EBITDA of £5m-6m.

Looking ahead, the retailer said it expects to see “continued revenue growth in line with our expectations, but remain cautious on the speed of recovery in consumer buying patterns, which we expect to temporarily impact the recovery of our gross product margin.”

Chief executive Mark Smithson said: “I continue to remain proud of the entire team at Marks Electrical for delivering a record peak trading period while gaining market share and maintaining our industry-leading Trustpilot score of 4.8. This further demonstrates the strength and attractiveness of our market-leading customer offering and as brand awareness improves, we continue to see a strong repeat customer rate.

“While I am personally frustrated about our expected margin progression in the second half, I remain confident about our long-term growth prospects and continue to be impressed by our ability to deliver market share gains profitably, against a fiercely competitive backdrop, while maintaining the highest levels of customer service standards in the industry.”

Smithson added: “As we work tirelessly as a team to enhance our gross product margin in the remaining months of FY24 and into FY25, I also know from 37 years of trading that margin fluctuations are inevitable; they present us with an opportunity to learn and will ultimately enable the group to deliver long-term value creation and position us as the UK’s leading premium electrical retailer.”