Carpetright warns on profit after a slowdown in sales
Floor coverings retailer Carpetright has warned on profit after sales slowed in the eight weeks to 22 March 2014.
UK like-for-like sales edged up 0.2% in the period which was below the 1.9% increase seen in the 13 weeks to 25 January 2014. Total sales dropped by 0.8%.
Carpetright said the pace of recovery seen in its third quarter had not been sustained despite an improvement in the UK housing market.
In the eight week period sales on both a like-for-like and total basis fell by 5.3% in the group’s Rest of Europe business, which includes the Netherlands, Belgium and the Republic of Ireland.
Never Miss a Retail Update!Carpetright said the slowing UK sales, together with continued difficult trading conditions in the Netherlands, meant that it now expects underlying pre-tax profit for the year ended 26 April 2014 to be in the range of £3.5 million to £5.5 million.
The group’s executive chairman Lord Harris said: “In our last trading statement, we reported that like-for-like sales in the UK were volatile, and this remains the case. Nevertheless, based on previous experience we had expected to see some recovery as UK housing transaction volumes improved. In the event, this has yet to materialise and the momentum established in the third quarter was not sustained. Excluding the expected decrease in sales from our wholesale business, the core retail business would have reported a like-for-like increase of 0.9%.”
Carpetright said it had strengthened the leadership of its Rest of Europe business with the appointment of former Dreams chief executive Nick Worthington as operations director.
Looking ahead Lord Harris added: “With the important Easter trading period still to come, we are continuing to concentrate on a range of self-help measures as we seek to improve the group’s performance.”
