PROFITS forecasts were raised for the third time in six months at Carphone Warehouse, as it gears up for the launch of its first Best Buy megastore this week.

The group, which jointly owns its retail business with US partner Best Buy, said strong sales of smartphones and cost cuts helped increase earnings growth in Carphone Warehouse stores.

It expects its share of annual retail profits to be around £47m for the year to the end of March – up on the £40m-£45m range given at its last upgrade in January.

Carphone and Best Buy are preparing to open the first of its Big Box consumer electronics stores in Thurrock, Essex, this Friday, after spinning off from the TalkTalk broadband business last month. More Best Buy stores will open in Southampton and the West Midlands in June, followed by Croydon and an Aintree store on the Racecourse Retail Park, creating 100 new jobs.

Carphone plans to pump another £35m-£40m into Big Box store launches in the current financial year and hopes to have around 70 locations by 2014. Chairman Charles Dunstone said: “The demerger is now successfully completed and we are moving into our next phase of growth.”

He added that while the wider economy “will undoubtedly present challenges”, the group aimed to offer earnings growth this year.

Carphone is pencilling in profits from its share of the retail business to be held largely firm in the year to next March with Best Buy investment taken into account, guiding for between £47m to £50m.