Currys FY 2025/26 slides: profit jumps 18% as services drive growth

Currys reported adjusted profit before tax of £191m, up 18% YoY, and like-for-like sales growth of 4% despite macro uncertainty. The company lifted adjusted EPS 19% to 13.4p and improved free cash flow to £157m, moving to net cash of £176m (from net debt of £805m in 2019/20), while proposing a dividend of 3.0p (+100%) and launching a new £50m share buyback. Guidance for 2026/27 calls for comfortable consensus-adjusted PBT of £198m and capex rising to ~£95m, but shares fell 3.12% to $157.7, signaling investor caution around competitive and macro headwinds.

Analysis

The cleaner signal here is not a broad handset demand boom; it is Apple using a denser product cadence to preserve upgrade intensity and keep the installed base inside its ecosystem. That supports AAPL’s mix and services attach more than it supports a dramatic unit surprise, which means the equity can work even if total phone volumes are only flat to modestly up. The market should also think about channel behavior: a stretched launch calendar reduces the one-shot inventory risk for retailers, but it also reduces the chance of a single, oversized sell-through inflection.

For second-order effects, component names with exposure to higher storage tiers and premium configurations can see the best leverage if the new models push BOM content upward. SNDK is the most plausible listed read-through from this set, but only if the launch mix shows meaningful storage upsell; otherwise the benefit stays concentrated at the OEM level. TGT is at best a weak traffic/accessory beneficiary, while the broader consumer channel is more likely to see margin normalization than a true demand step-up.

The contrarian risk is that multiple launches through 2027 may reflect segmentation, not acceleration. More SKUs can cannibalize each other, especially if Apple uses price-point dispersion to defend share, which is supportive for revenue but less helpful for gross margin and channel inventory turns. Falsifiers to watch over the next 1-3 months are upgrade rates, carrier subsidy behavior, and inventory build at distributors; over 6-18 months, the key question is whether services attach and storage mix rise enough to offset any ASP dilution.

Key Decisions for Investors

• Long AAPL on pullbacks into the next product-cycle setup; use a 3-6 month horizon and prefer shares or 6-12 month call spreads. Risk/reward is best if the market underestimates services attach and ecosystem retention, but fade the trade if launch chatter is already fully priced and channel checks show weak upgrade intent.
• Watch SNDK as a tactical second-order beneficiary only if launch evidence points to higher storage tiers or AI-led content growth. No position until BOM/channel data confirm incremental NAND demand; if confirmed, a small long makes sense versus a basket of lower-beta consumer names.
• No direct trade in TGT from this note; keep it on the monitor list for accessory/traffic spillover rather than a primary expression. If holiday electronics traffic fails to improve after launch windows, treat any strength in retail proxies as a fade.
• Set a hard alert on Apple channel inventory and carrier activation data over the next 1-2 quarters. If inventory turns worsen or upgrade rates stall, reduce AAPL exposure quickly because the market will likely re-rate the story from growth optionality to SKU cannibalization.