Electrocomponents says action has already been taken to reverse a first quarter sales slump in the UK. In an interim statement covering the period to June 30, the distributor revealed sales in France had also fallen and gross margins were 0.8% weaker than the same period last year.
Underlying sales growth in the first quarter was 3%, with an improved sales performance in May and June of 4%. International sales, which comprises over 70% of revenues, grew by 5%. The UK declined by 2% (UK ex-Raspberry Pi declined by 1%). Within International, Continental Europe grew by 2%, impacted by a weaker market in France, North America grew by 8% and Asia Pacific grew by 8%.
Planned investment in the Group’s global strategy will continue, notably the eCommerce with a Human Touch and One Global Offer initiatives where good progress has been made in the quarter. eCommerce sales grew 5% and sales of the Famous For product categories, comprising electronics and automation and control ranges, also grew by 5%.
The gross margin fall reflects expected mix effects due to the stronger sales growth in North America and Electrocomponents’ Famous For product categories, and increased discounting in the UK and Asia Pacific.
Actions taken in the UK have already improved sales trends, says the company. Action is also being taken to improve the sales performance in France and the gross margin in Asia Pacific.
Ian Mason, Group Chief Executive, commented: “Group underlying sales growth in the first quarter was 3%, with combined sales growth across May and June of 4%. There has been further progress implementing our global strategy and performance in all markets was good with the exception of the UK and France.”
He continued, “We are taking action to improve the sales performance in the UK and France and the gross margin in Asia Pacific, and we will continue to invest in our global strategy in order to drive performance and deliver our medium-term growth ambitions.”
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