Carpetright warns on profits after poor sales in the Netherlands
Carpet and flooring retailer Carpetright has warned that its full year pre-tax profits are expected to be below the lower end of current market expectations after seeing continuing poor sales at its business in the Netherlands.
In the 13 weeks to 25 January 2014, like-for-like sales in the UK increased by 1.9% with total sales edging up 0.6%.
However, like-for-like sales in local currency terms in its Rest of Europe business, which includes the Netherlands, Belgium and the Republic of Ireland, decreased by 7.7% with total sales declining by 7.5%. After the impact of currency movements this translated to a 6.3% decrease in total sales.
Although Carpetright performed in line with expectations in Belgium and the Republic of Ireland, the group said trading in its Rest of Europe business continued to be dominated by difficult economic conditions in the Netherlands. As a result, it now expects the business unit to be loss making for the current financial year.
Never Miss a Retail Update!Carpetright said that although tough trading conditions had persisted in the UK, a range of self-help measures had enabled it to grow its sales. The group continued to reduce and modernise its UK store base during the period and now operates from 473 stores.
Executive chairman Lord Harris said: “In the UK, the pace of the recovery remains uncertain in the face of continuing sales volatility but we are confident that our self-help measures have further potential. However, with a further weakening of the market in the Netherlands, we now expect underlying pre-tax profits for the full year will be below the lower end of the current range of market expectations.”
