CPW.L Share News (CPW)

(Adds CEO comment, analyst comment, detail.) By Simon Zekaria Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Carphone Warehouse Group PLC (CPW.LN) Wednesday said it is confident of meeting its full-year expectations after the U.K. mobile phone retailer posted a forecast-beating 3.7% rise in first-quarter retail sales. Chief Executive Roger Taylor told Dow Jones Newswires he is "more optimistic" now than back in April about the U.K. economy and does not expect a double-dip recession. "I believe the changes the government has made are right for the U.K. The U.K. will be in a stronger position in 18 months time." Retailers have expressed concern that tax hikes and public spending cuts introduced by the coalition government to rein in borrowing will depress consumer spending. For the fiscal year to March 2011, the group guided for same-store retail sales growing between zero and 3% and earnings before interest and tax rising 15% to 20% with continued margin improvement. "We've had a good start to the year...enabling us to reiterate the full-year guidance," Taylor said. First-quarter sales from stores open at least a year at Carphone Warehouse Europe beat analysts' forecasts to rise 3.7% on a constant currency basis, driven by smartphone purchases. "We are benefiting from the increasing penetration and usage of smartphones and the cascading of smart features into phones at all price points," Taylor said. However, connections were down 1.1% due to a reduction in sales of lower-value pre-pay phones. Best Buy Mobile in the U.S. recorded 29.7% growth in connections to reach a total of 1.43 million. The business is on track to increase its standalone store count to between 150 and 175 from 90 by the end of the fiscal year. Best Buy U.K. will open a further three stores later in the year, the company said. Taylor added that the big-box electrical retailer, which has opened three stores to date, would have online trading from October. The group will provide a detailed update on the U.K. store rollout around March next year. Taylor said Best Buy would successfully manage recent executive changes announced earlier this month, with Andrew Harrison replacing Paul Antoniadis to take on overall responsibility for the retailer's U.K. launch. "That incubator phase is now over. We are in full running mode. Running a big business is something that Andrew will fulfill better than anyone." Virgin Mobile France posted revenue of 93 million euros, in line with group expectations. However, its customer base fell by 20,000. The group said that with much of the Tele2 integration now complete, the business is focused on driving sales in the second half. A Citigroup analyst said the update was ahead of expectations on most lines. Still, at 0729 GMT, Carphone Warehouse's shares were down 4 pence, or 1.7%, at 212 pence, valuing the company at GBP970 million. Newly-demerged Carphone Warehouse comprises core retail business Carphone Warehouse Europe, a 50% stake in Best Buy Europe (BBE)--Carphone's joint venture with U.S. electronics giant Best Buy Co. Inc. (BBY)--and a 47.5% share in mobile operator Virgin Mobile France. Best Buy Europe combines the core Carphone Warehouse retail business, under the Carphone Warehouse and Phone House brands, a profit share from Best Buy Mobile in the U.S. and Best Buy stores. At the end of March, Carphone Warehouse Group split into two separately-listed companies--fixed-line and broadband business TalkTalk Telecom Group PLC (TALK.LN), the largest residential broadband provider in the U.K., and retailer Carphone Warehouse. By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; simon.zekaria@dowjones.com (END) Dow Jones Newswires July 28, 2010 03:47 ET (07:47 GMT)