Curry’s (LON: CURY) share price has been in a freefall in the past few days as concerns about the company continued. The stock plunged by more than 5% and landed to the lowest level since 2003. It has collapsed by more than 89% from its all-time high and by over 56% from its highest point this year.
Profit warning triggers sell-off
The UK retail sector is going through a difficult phase as inflation remains at an elevated level. Data published last Friday showed that the country’s retail sales plunged by 0.4% in November as inflation continued rising.
As a result, most retail stocks, including giants like Tesco, Sainsbury’s, and Ocado have declined sharply since then. Still, no other retailer has done worse than Curry’s.
The electronics retailer has seen its stock price collapse by more than 20% in the past two days straight. This decline happened after the company warned that its profit will be lower than expected because of its Nordics business.
Curry’s revenue dropped by 7% while the group loss before tax came in at 17 million pounds while its statutory loss before tax came in at 548 million pound.
However the company warned that its international business was struggling as its competitors continued massive discounting. This discounting comes at a time when most electronic retailers are struggling with significant inventories. Commenting on the issue, the firm’s CEO said:
“We expect these pressures, intense though they are, to be temporary – demand will normalise, excess stock will wash through, and competitors will find unprofitable aggression hard to sustain. We’ve also stepped up our self-help actions on margins and cost.”
Curry’s faces a tough period ahead as competition with tech e-commerce companies intensifies. And with UK inflation expected to remain high in 2023, demand will likely be relatively weak. The company faces no major catalyst that will push its stock higher.
Curry’s share price forecast
The daily chart shows that the Curry’s stock price performance has moved from bad to worse in the past few days. As it dropped, it managed to move below the important support level at 54.90p, which was the lowest level on October 3.
The stock remains below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the oversold level. It is the most oversold it has been since January. The two moving averages have made a bearish crossover.
Therefore, the stock will likely continue falling as sellers target the next key support level at 45p. A move above the resistance at 65p will invalidate the bearish view.
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