Carpetright warns on profit
Floorcoverings retailer Carpetright has cut the forecast for its full year underlying pre-tax profit to between £3 million and £4 million as it struggles with weak bed sales in the UK and deteriorating trade in Europe.
In the eleven weeks to 14 April, group sales declined by 4.2% while UK sales fell 3.2%. Sales across Europe declined by 4.7% with like-for-like sales down 4.4%.
The group’s UK business reported an improved performance in the final quarter with like-for-like sales growing by 1.4%. Carpetright said its 32 refurbished stores continued to outperform the core estate and further refinements were being made to the new format ahead of a roll-out.
Carpetright said the performance of its new bed range launched earlier this year fell below management expectations with sales improving only "marginally" on the previous range. Bed sales account for just 6% of total revenue but the shortfall had impacted profit which the retailer now estimates to be between £3 million and £4 million for the year ending 28 April.
The group's European business saw a reversal of the stronger trading momentum reported in Q3, as weakening consumer confidence in The Netherlands and Belgium was reflected in lower store footfall.
Lord Harris of Peckham, Chairman and Chief Executive, said: "The fragile confidence of our customers continues to produce a weak and volatile floorcoverings market. We are encouraged to see the UK floorcoverings business return to like-for-like sales growth and are cautiously optimistic that this trend will continue in to the new financial year.
"In contrast to this, bed sales, while still showing growth, have been below management expectations and tougher trading conditions in The Netherlands and Belgium have also contributed to a weaker group result for the final quarter."
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