Carpetright sees FY profit at lower end of market expectations

Specialist carpet and floor coverings retailer Carpetright said on Tuesday that its full-year profit is expected to be towards the lower end of the current range of market expectations for underlying pre-tax profit of £13.9m to £16.2m.

In an update for the 12 weeks to 22 April, the company said it saw continued growth in the UK, with like-for-like sales up 1.4% despite tougher market conditions, while the rest of Europe continues to benefit from improving confidence and positive currency impact.

During the period, Carpetright opened three new stores in Liverpool, Leeds and Bath and continued to make progress in reducing fixed operating costs, with two stores relocated into smaller units and three closures, leaving a total of 427 trading locations.

In Rest of Europe, trading was in line with the group's expectations, underpinned by a continuing recovery in confidence particularly in the Netherlands, with LFL sales up 1.9%, or 11% in reported currency. One store was relocated to a smaller unit, leaving 138 trading locations.

Chief executive Wilf Walsh said: "In common with other retailers in the home improvement sector in the UK we have experienced tougher trading conditions over the last three months.

"Following a further acceleration of the investment programme in the final quarter we have completed 188 store refurbishments - surpassing our target of 150 stores, which represents over 40% of the UK estate. Despite the inevitable disruption factor, the performance of these refurbished stores has been encouraging giving us confidence to continue with the programme.

"Whilst we remain confident in our turnaround plan, the level of sales growth in our final quarter leads us to expect that full year profits will be towards the lower end of the current range."