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Carpetright warns on profits as sales drop

Published: 1 February 2011
Carpetright has issued a profit warning after group sales declined 6.4% in its third financial quarter.
Carpetright warns on profits as sales drop
UK and Republic of Ireland (ROI) sales dropped by 5% for the 13 weeks to January 29, 2011, with like-for-like sales down 7.7%.

Chairman and chief executive Lord Harris of Peckham said: "The tough trading conditions in the UK and Republic of Ireland have continued into the third quarter of our financial year, with adverse weather conditions and fragile consumer confidence producing a difficult floor coverings market. As we stated at our last update, we were expecting January trading to be boosted by the impact of snow in the comparative period. Although we have achieved an increase in sales year on year since Christmas, this has not been at the level expected. This causes us to remain cautious about the outlook for the remainder of the financial year."

He added: "Given the difficult trading conditions and the likely outturn for the balance of the year, the board now expects profit for the year to April 30, 2011, will be below last year and below the current range of market expectations, although ahead of those achieved in the 2009 full year."

The company expects total UK and ROI full-year margin to be in line with previous guidance of a 50 basis point increase on last year. Lord Harris also said the company's focus on effective cost management has continued, and "the business remains well placed to capitalise on opportunities when economic conditions improve."

The retailer closed five standalone stores and five concessions during the quarter, taking the store portfolio to 574 in total.

Carpetright will report its year-end pre-close trading update on April 27, 2011.

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