Carpetright in profit warning as trading slides
31 January 2012 10:42
The trading woes of the country's largest floor-covering retailer showed no signs of easing today after it issued a fresh profits warning in response to slow trading.
Carpetright, which has 501 stores in the UK, said sales remained volatile and sensitive to promotions, meaning profits for the year to April 28th were likely to fall short of even the most pessimistic of forecasts.
Despite the difficult weather conditions of last year, Carpetright's like-for-like sales were down 0.5% in the 12 weeks to January 21st, while margins continue to be impacted by the need for discounting.
In December, Carpetright slid to a bottom-line loss of £800,000 for the six months to October 29th, compared to profits of £9.8 million a year earlier.
This led analysts to forecast a full-year profits figure of between £8.8 million and £11.9 million but this is now likely to come down to around £8 million following today's latest profits warning.
The continued pressure on trading in the UK, where total sales were down 4.8% in the quarter, was partially offset by its businesses in the Netherlands, Belgium and Ireland, with sales up 0.3% on a like-for-like basis.
Lord Harris, Carpetright's chairman and a veteran of the retail sector with more than 50 years experience, remains encouraged by the relaunch of the company's bed offer and the performance of recently refurbished stores.
He added: "Looking forward, I see no respite from the challenging environment over the next 12 months but remain confident the group will emerge in a strong position to deliver future growth once consumer demand improves."
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