Sales slip further at Carpetright
Carpetright has seen sales drop further in the past four months.
Previously the group had warned that like for like sales had fallen by 1% in the eight weeks to 25 June. Now it has told shareholders that like for like sales are down by 2.9% in the 25 week period to 22 October.
It also says full year gross margin will be between 150-200 basis points lower due to ‘increased sourcing costs resulting from the devaluation of sterling, competitive market conditions and a mix impact.’
However it says it still expects profits to be around £18.5m, as it expects to gain from the roll-out of its updated store format, of which there are now 49 branches.
‘Trading conditions in the UK in the first half reflect variable consumer demand and increased competitive pressures. Against this background, our plan to revitalise the UK business remains on track and we are now almost halfway towards our target of 100 store refurbishments in the current financial year, with investment in the first half weighted to the latter part of the period,’ says Wilf Walsh, Carpetright ceo.
‘The initial trading performance of these newly refurbished stores has been encouraging - they are outperforming comparable stores in the estate, giving us confidence that where we invest we are able to drive a material improvement in performance. In addition, the introduction of new hard flooring sections in 26 stores, has contributed to a 15% increase in laminate/luxury vinyl tile sales. We continue to make progress with our plans to reduce property costs.
‘Trading in the Rest of Europe continues to improve and is a little ahead of our expectations. As we enter the second half, we are looking forward to implementing the next phase of our refurbishment and rebranding programme as we continue our drive to update and revitalise the business. With the benefit of recent UK investment expected to flow through as the second half progresses, further significant refurbishment work already underway and a continued improvement in the Rest of Europe, our guidance for the year as a whole remains unchanged.’