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.