Carpetright sees sales rise but margins fall

Tuesday 29 July 2014 09.01
Carpetright has 22 stores in Ireland
Carpetright has 22 stores in Ireland

Carpetright, Britain's biggest floor coverings retailer, said underlying sales had risen 6.1% in its first quarter although margins had been hurt by promotions.

The firm has had a torrid time of late, issuing a string of profit warnings and announcing a 53% slump in annual profit last month as improvements to stores and ranges failed to offset weak trade in Britain and the Netherlands.

Meanwhile company's 22 Irish stores failed to return a profit to the group during the quarter.

Carpetright said sales at British stores open over a year rose 6.1% in the 13 weeks to 26 July, helped by a particularly strong July, though gross profit margins fell 260 basis points due to a roll out of promotions.

The firm said it now expected a full-year British decline of between 50 and 100 basis points, as opposed to previous guidance of flat margins, but said its expectations for full-year profit remained unchanged.

In its European division, made up of Ireland, Netherlands and Belgium, like-for-like sales fell 3.6%, although the firm said the latter two countries had returned to profit in the quarter, aided by a rise in gross profit margins.

Shares in the firm, which trades from 467 stores, closed at 530 pence yesterday, down 18% on a year ago, valuing the business at £360m.