Published on 24 - April - 2012
Carpetright sees UK sales decline by 3.2% but like-for-likes up 1.4%The carpet and floor coverings retailer announced group sales had dropped by 4.2% in the 11 weeks to April 14, 2012, with total sales across Europe decreasing by 4.7%, a LfL drop of 4.4%.
The carpet retailer has issued another profit warning in its pre-close trading update
Below-par bed sales in the UK alongside weakening Europe trade means Carpetright's full year underlying pre-tax profit predictions are £3m - £4m, and its year-end debt will be below £45m, as was predicted last quarter.
The improved LfL UK sales were "driven by strong emphasis on value and service, introduction of a wider laminate range and an uplift in sales from refurbished stores." The 32 refurbished stores continue to outperform the retailer's core estate, and further refinements are being made to the new format ahead of a roll-out.
Following the launch of a revised beds range in early 2012, bed sales grew marginally year-on-year in the fourth quarter, with an improved margin over 700bps, accounting for over 6% of total sales in the period. While the retailer said it was encouraged by the customer response to the new range, it admitted the overall level of sales growth had been "behind initial expectations, with a corresponding impact on group profitability."
The retailer is planning a series of performance improvement initiatives for the coming financial year.
Carpetright's chief executive Lord Harris of Peckham 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 into 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."
The group's European business saw a reversal of the stronger trading momentum reported at the close of Q3, when LfL sales were up 0.3%. This quarter weaker consumer confidence in Belgium and the Netherlands resulted in lower store footfall, but it was better news in the Republic of Ireland, where recovery plans have seen continued sales growth.
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