Carpetright sees H1 profitability below last year
Carpetright said on Tuesday that it expects profitability in the first half to be below the previous year, but remains confident of a stronger performance in the second half.
In an update on trading for the 25 weeks to 21 October, the company said total group sales were up 1.8%, with like-for-like sales growth of 0.8%. In the flooring category, sales rose 2.1%, which Carpetright said was a pleasing performance “given the increased level of competition”. However, this was partly offset by reduced bed sales which were impacted by an acceleration of re-ranging activity to improve the proposition.
In Rest of Europe, LFL sales were up 6.3% in local currency terms.
Chief executive Wilf Walsh said: "Whilst we expect the group first half profit to be below that of the prior year, we are pleased with the improvement in sales in the Rest of Europe and beds in the UK over the past few weeks. When these are combined with continued progress in our core flooring category we expect a significantly stronger second half with full year profit within the current range of market expectations.
"We look forward to updating our shareholders on the progress in our plan and momentum in the business at our first half results presentation in December."
Shore Capital reiterated its ‘hold’ rating on the stock and said: “Whilst clearly progress is being made in terms of the proposition and we view the strategy put in place by management as sound, we believe the volatility reflected in the consumption of big ticket spending and increased competition presents a risk to trading.”
ETX Capital analyst Neil Wilson said: “Management seems to be putting a lot of faith on ‘a significantly stronger second half’ to deliver this. It will need to put its foot to the floor to achieve this given the weaker market environment.
“After enjoying a bounce in the spring the stock has scrubbed these gains to trade just a sliver above last December’s multi-year lows.”
At 0900 BST, the shares were down 3.9% to 172.90p.