Poor Vista sales hit Dixons profits

Dixons Stores Group (DSG) has blamed poor sales of Microsoft's Windows Vista for a £20m slump in UK profits.

DSG said in a trading statement issued today that lower than expected sales of the operating system in its PC World stores had cut profits by two per cent, and led to stock control issues after the company ordered too many Vista-loaded laptops.

"The reduction in laptop stocks that arose out of disappointing sales of Vista-related products, and a changing sales mix, have reduced gross margins by around two per cent in the computing division, impacting Group profits by around £20m in the first half," said DSG group chairman Sir John Collins.

"Stocks are now at normal levels and we expect to recover some of the lost margin through the second half."

Overall the group is optimistic about the future of its UK business, although Collins said that concerns remain about the outlook for 2008 retail sales.

The Christmas period, which typically accounts for half of DSG's profits, looks good for the company. Strong sales are expected for high-definition TVs, iPods, MP3 players, laptops, digital cameras, games consoles and sat-nav equipment.

See also:

Vista fails to drive new PC sales

In-Stat reports OS not driving upgrades  24 May 2007

Windows users paying $21.50 'patent tax'

Patent deals weigh heavy on retail pricing, open source group alleges  17 Apr 2007

Ballmer warns against Vista optimism

New OS will not be the silver bullet that reignites worldwide PC sales  19 Feb 2007

Windows Vista sales draw cautious optimism

Analysts praise early numbers, but long-term outlook still up in the air  12 Feb 2007

Microsoft releases Vista and Office 2007

Operating system to reach consumers at last  30 Jan 2007

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