Carpetright warns on profit again as sales slowWednesday 26 March 2014 09.44
Carpetright, Britain's biggest floor coverings retailer, has cut its annual profit forecast for the third time in less than six months, saying sales growth has slowed and it has yet to see any benefit from an improving housing market.
The firm has more than 470 UK stores and concessions as well as 142 stores in Ireland, the Netherlands and Belgium.
Carpetright is revamping its stores and product ranges in a bid to counter subdued consumer spending and tough competition in Britain, and reverse a slide in sales in the Netherlands.
However, the firm said UK sales growth at stores open over a year slowed to 0.2% in the eight weeks to March 22 from 1.9% in its fiscal third quarter, while sales elsewhere in Europe fell 5.3%, dragged down by the Netherlands.
Britain's housing market has been steadily improving, fuelled by a government scheme that has boosted buyer demand.
Banks approved the highest level of mortgages since 2007 in January and last month the total amount of lending to buy homes rose to its highest level in nearly two years.
Analysts noted the improving UK housing market had started to benefit some other retailers, suggesting Carpetright was being held back by company-specific problems, such as excess selling space and high rents.
Topps Tiles, Britain's largest tile specialist, said earlier this week that it expected first-half profit to be up 70% on a year ago after a strong rise in sales.
Carpetright said it now expected underlying pre-tax profit for the year to April 26 to be in a range of £3.5-5.5m, below analysts' consensus forecast of £7.78m, according to Reuters data.
That was its third downgrade in almost six months after a warning last October, which prompted boss Darren Shapland to quit, and another in January.