Profits at Dixons Carphone Plunged by 60% in the first half as people shunned expensive mobile phones and held onto their old handsets for longer.
Dixons Carphone warned on profits in August because of changes in the phone market.
Chief executive Seb James said it was "tougher" but he was taking action to change its mobile business.
Shares in Dixons Carphone rose by 7.9% following the announcement.
Pre-tax profits fell to £61m in the six months to 28 October compared with £154m in the same period last year on group sales down 1% at £4.8bn.
Like-for-like sales, which strip out revenue from new shops opened during the period, rose by 4%.
However, this was due to stronger turnover in Dixons Carphone's electricals business as well as its divisions in Greece and the Nordic region.
The company also pointed out that "the later launch of the iPhone X pushed some sales into the second half of our financial year".