DSG International Plc increased like for like sales 5 percent in the first 16 weeks of its financial year on strong demand for flat panel TVs and a recovery in the market for washing machines and fridges.

But the stock fell 2.9 percent in early trade to 203 3/4 pence after having beaten the retail sector by 15 percent this year.

Britain's biggest electrical goods retailer, whose brands include Currys and PC World, said on Wednesday its like for like sales rose 5 percent in the 16 weeks to August 19.

Forecasts had ranged from 4.5 percent to 6.4 percent, according to a Reuters poll of four analysts.

It's broadly in line with expectations, said Societe Generale analyst John Baillie. They've delivered the recovery in the UK and continued strong growth in Scandinavia. The only disappointment is Italy, but it's only a small part of the group.

Strong demand for digital products has helped to revive the electrical goods market, which had been struggling with cut price competition and slower consumer spending growth.

The market also received a boost from strong demand for flat panel TVs during the recent World Cup.

DSG said like for like sales in its electricals division were up 6 percent in the 16 week period, helped by signs of a recovery in the UK market for washing machines and fridges.

But like for like sales in its computing division were flat, it said in a statement ahead of its annual shareholder meeting.

Total sales were up 14 percent in the period.

Like-for-like sales in Scandinavia, where DSG trades under the Elkjop banner, were up 9 percent. But they were down 7 percent at its Italian business, UniEuro.

Overall the group has performed well in most of our markets during the first 16 weeks of this financial year, Chief Executive John Clare said in the statement.

He said it was too early to draw conclusions for the full financial year, because the first quarter is traditionally one of the quietest for the group.

DSG said like for like gross margins a measure of profitability were in line with the same period last year.

Societe Generale's Baillie kept his full year pretax profit forecast at 348 million pounds, as well as a buy rating on DSG shares.

They closed at 209 3/4 pence on Tuesday, valuing the business at about 3.8 billion pounds.

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