British-based AO World, which sells products ranging from fridges and washing machines to phones and laptops, said it had incurred significantly higher costs in the period to the end of December, which is the third quarter of its fiscal year, particularly in handling returned goods.

JP Morgan analysts said AO World's additional costs would "more than offset" its revenue growth and cut their annual earnings estimate for the company by 11%.

AO World shares, whose price more than quadrupled in 2020 when it benefited from a spike in demand as millions of people worked from home due to COVID-19 restrictions, were 6% lower at 0854 GMT, hitting the bottom of the FTSE 250 mid-cap index.

The company said revenue jumped by more than 67% in Britain to 457.3 million pounds ($622 million) in the quarter, while Germany saw growth of 77.4% to 73.6 million euros ($89 million).

"We've seen ten years of change in ten months and experienced our strongest ever peak trading period," AO World Chief Executive John Roberts said, adding that the company had invested for the future.

"We backed ourselves by investing early in warehouses, vehicles, stock and people," Roberts said.

AO World said it had doubled its warehouse capacity ahead of Britain's exit from the European Union.

"This not only set us up to satisfy customer demand for electricals for the current crisis but also for the longer term, as the structural shift to online becomes a permanent feature of the market in the UK and Germany," Roberts said.

($1 = 0.7350 pounds)

($1 = 0.8257 euros)

(Reporting by Pushkala Aripaka and Muvija M in Bengaluru; Editing by Arun Koyyur and Alexander Smith)