AO has upped it annual earnings outlook for the third time in just over three months after it said its cost-cutting efforts were paying off.
The Bolton-headquartered online electricals giant said its profitability has seen a better-than-expected improvement as it drives cost savings thanks to a "resilient" customer base.
AO said price increases across mobiles have also been slightly higher than forecast.
READ MORE: Click here to sign up to the BusinessLive North West newsletter
It expects underlying earnings to be in the range of £37.5m to £45m for the full year, up from the £30m to £40m guided for last month.
The group had already increased earnings guidance in November and again in January as its turnaround plan to strip out costs has been bearing fruit.
In a statement to the London Stock Exchange, AO said: "The steps we have taken to simplify the business and become more efficient have outperformed expectations and been delivered quicker than expected."
"Margin improvement initiatives coupled with a continued resilient underlying customer base has driven higher retail gross margins than previously expected and we anticipate that this will continue for the remaining five weeks of the financial year," it added.
It comes after AO World slumped to a £12m loss in its first half, with shares hammered last year following a series of profit warnings as the cost crisis hit consumer spending on white goods, and due to labour shortages and supply chain disruption.
The company started its turnaround plan with a £40m fundraising round last summer in a bid to strengthen its balance sheet amid fears of a cash crunch.
AO has closed its loss-making German operation as part of the shake-up and has launched action to save at least £30m a year by 2023-24 – including by recently axing senior and middle management jobs.
The firm has also ditched unprofitable products while introducing delivery charges and cutting cashback incentives to reduce the cost of sales.
READ MORE:
Majority stake in Gary Neville's content company Buzz16 sold in multi-million pound deal
Iconic fashion retailer Hervia with 'supergroup' plans reopens after transformation
Essar Group to invest $2.4bn at Stanlow site through new venture
Analysts rue 'missed opportunity' for GB Group as prospect of a new takeover bid remains
