Shares in Topps Tiles hit the floor (sorry) in early trading after the retailer warned full-year profit is likely to be at the lower end of expectation.
The retailer said revenues in the year to the end of September are expected to hit £211.6m, down 2.9 per cent from £215m last year (when revenues rose 4.2 per cent).
During the 13 weeks to the end of September alone, revenues fell three per cent, it said.
However, it added that its strategy of "out-specialising the specialists" remained on track. It launched 34 new tile ranges during the year, which accounted for 9.2 per cent of sales, and opened five new stores, bringing its total up to 372.
Rewards+, its loyalty scheme, now has 55,000 members, up 35 per cent from last year.
Shares in the retailer were down four per cent at 71.75p in early trading.
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Why it's interesting
DIY is often one of the first casualties of low consumer confidence, and confidence has been pretty low since the Brexit vote, with high inflation and low wage growth hitting consumers where it hurts.
Topps Tiles acknowledged as much today, saying market conditions remain "challenging", and warning adjusted pre-tax profits for the year to the end of September will be at the lower end of the current range of expectations.
But the retailer is taking steps to improve its situation, with new ranges, a rewards scheme, extra training for staff and even a "small acquisition in the commercial tile market".
Meanwhile, consumer confidence is beginning to rise: at the end of last month research by the Centre for Economics and Business Research (Cebr) showed shoppers were at their most optimistic in six months, while figures published this morning by the British Retail Consortium showed British shop prices were edging towards inflation for the first time in four years.
What Topps Tiles said
Matthew Williams, its chief executive, said:
It has been an important development year for the group. Significant strategic progress has been made and we remain excited by the growth opportunities open to us. Despite this, the tougher market conditions we first highlighted in the second quarter continued into the final quarter and, as a result, we are taking a prudent view on market conditions for the year ahead.