Topps Tiles announced a confident outlook in this morning’s trading update for the 13-week period ended 1 January, with like-for-like sales on a two-year basis up 21 per cent.
The tile specialist stated that on a one-year basis, retail sales were one per cent higher in the first 13 weeks against a very strong comparative in FY21, which was up 19.9 per cent.
Compared to last year, Topps saw good levels of trading extending further into December as customers sought to finish projects by Christmas.
During the quarter, it has taken significant steps to fully mitigate or pass through cost pressures caused by higher shipping costs and general inflation in cost of goods, thereby protecting gross profit.
However, as selling prices will increase by a lower percentage than cost prices, Topps anticipates percentage gross margins to be moderately lower year on year as a result.
Operating costs in the business remain “well controlled” and in line with forecasts, despite the ongoing pressures in areas such as utilities, employment costs, fuel costs and taxation.
The commercial side of the business has started the new year with good momentum and sales in the first three months are 21 per cent higher than last year.
Against the backdrop of global supply chain challenges, over the first quarter Topps continued to hold higher levels of inventory than ever before.
The stock holding and the flexibility in the supply chain has provided a buffer against the current uncertainties, and its statement said it was “well positioned” in the marketplace in terms of availability of both product and shipping
Stores have needed to adapt to the additional COVID-19 control measures implemented at the end of 2021 and at this stage, it is yet to see any significant impact on customer behaviour.
The update stated that Topps, like many businesses, has been impacted by an increase in staff absences, but said that its strong operational focus and website make it ready to trade through any period of tighter restrictions.
Rob Parker, chief exec, said: “We have made an encouraging start to the new financial year, with strong customer demand during the first quarter and like-for-like sales growth on both a two year and one year basis against tough comparatives.”
“Global supply chain challenges, higher staff absence due to Covid-19 and material cost price inflation continue to provide significant headwinds, however we are managing these challenges effectively. I am confident that our successful strategy and strong balance sheet leave us well-positioned to deliver sustainable long term growth and our 20 per cent market share goal of ‘1 in 5 by 2025’.”