Darty shares drop after warning of higher loss at Mistergooddeal

* Q1 sales up 1.7 pct l-f-l, French sales up 2 pct

* Sees higher-than-expected full-year loss at Mistergooddeal

* CEO expects decline of 2-3 pct in French market in 2014

* Shares (Frankfurt: DI6.F - news) fall 6 pct (Adds details, analyst comment)

By Dominique Vidalon

PARIS, Sept 11 (Reuters) - Darty Plc, Europe's No. 3 electrical goods retailer, said strong sales of TV sets during the soccer World Cup lifted first-quarter revenue, but warned a weaker-than-expected performance of its Mistergooddeal website would weigh on full-year results.

Darty said multimedia website Mistergooddeal, which it bought in December, faced tough price competition from online rivals and that its full-year loss would be approximately 5 million euros ($6.5 million) bigger than previously expected.

The group had initially forecast a loss of between 3 and 4 million euros at Mistergooddeal.

The warning sent Darty shares down 6 percent by 0921 GMT, underperforming a 0.2 percent decline in the European retail sector.

"On the back of this statement, we expect consensus forecasts to come down by 5 million euros (8 percent), reflecting the increased loss guidance on Mistergooddeal" Citi analysts said in a note.

This was after Darty, third in Europe by revenue after Dixons Carphone Plc and Metro AG (Xetra: 725750 - news) 's Media-Saturn, posted a 1.7 percent rise in like-for-like revenue for the first quarter to July 31.

Sales at Darty France, which makes 70 percent of group sales, rose 2 percent, an improvement from a 0.2 percent decline in the fourth quarter.

Darty, which outperformed a 0.7 percent rise in the overall French market during the quarter, said the performance reflected strong sales of TV sets in May and June ahead of the World Cup.

A cooler summer led to lower sales of refrigeration and air conditioning equipment, however, while tablet computer sales were hit by a decline in average selling prices.

DIFFICULT CONDITIONS

In France, where Darty is banking on the rollout of a franchise business to help weather difficult market conditions, the performance of the first franchise stores opened was "very encouraging", it said. The group opened a further nine franchise stores in the quarter, bringing the total to 13.

However, Darty cautioned that market conditions remained difficult in its core French market, where low consumer confidence remained a barrier to spending.

Chief Executive Regis Schultz told Reuters by phone he now expected a decline of between 2 and 3 percent in the overall French market in 2014 against 2 percent previously.

"The main problem is a lack of confidence ... When there is no special event (like the World Cup), people are not buying," Schultz said.

French consumer confidence was stable in August for the third month in a row, the official INSEE statistics agency said last week.

INSEE said in its monthly consumer survey that households were slightly less worried about unemployment, though it is still stuck above 10 percent and economic growth is nearly flat, but that inflation concerns were the lowest since December 1999.

Like others in the sector, Darty is facing weak consumer spending and competition from online retailers.

London-listed Darty, which has more than 450 stores in Europe, has responded by cutting costs, exiting loss-making operations in Italy and Spain and focusing on its core markets of France, Belgium and the Netherlands.

In December, Darty agreed to sell its Turkish business under a plan to eliminate losses in non-core markets.

In August, it agreed to sell its 60 percent stake in its Datart business in the Czech Republic and Slovakia in a deal valued at 5 million euros. (1 US dollar = 0.7735 euro) (Editing by David Holmes)