Carpetright cuts profits again as sales wear thin
CARPETRIGHT issued its third profit warning in less than six months yesterday, saying that the recovery in the housing market has yet to reach its tills and lead to more people refurbishing their homes.
The flooring specialist, whose boss Darren Shapland quit after its first October profit warning, said it now expected underlying pre-tax profit for the year to 26 April to be between £3.5m and £5.5m.
That compares with analysts’ already lowered forecasts of £7m to £8m, sending shares in the retailer tumbling five per cent yesterday.
Carpetright has been revamping its stores, expanding its product ranges and investing in its online business in a bid to counter subdued consumer spending in the UK, and stem declining sales in the Netherlands.
However UK like-for-like sales slowed to 0.2 per cent in the eight weeks to 22 March from 1.9 per cent in the third quarter, while sales in Europe fell 5.3 per cent, dragged down by The Netherlands.
Finance director Neil Page told City A.M. “The business is still getting growth but not a growth we were expecting at this stage. That is not to say growth won’t come but it hasn’t come yet.”
He added: “If you look at indicators on housing transactions and mortgage approvals – all are positive indicators expecting consumer spending to come through but it’s not coming through in the same pattern that it has historically.”