25th Oct 2016 07:17
LONDON (Alliance News) - Carpetright PLC on Tuesday said its full-year profit expectations remain unchanged, but reported a fall in sales in the first half of its financial year.
The carpet and floor coverings retailer said group sales fell by 2.7% in the 25 weeks ended October 22, having grown by 1.4% in the same period a year earlier, albeit that period had an extra week.
In the UK, like-for-like sales declined by 2.9%, having grown by 3.7% the year before, as total sales fell by 5.5%, having risen by 2.6% the year before.
Carpetright said its full-year gross profit percentage guidance in the UK is for a 150 to 200 basis points decline, due to increased sourcing costs resulting from the devaluation of sterling and competitive market conditions.
"Trading conditions in the UK in the first half reflect variable consumer demand and increased competitive pressures. Against this background, our plan to revitalise the UK business remains on track and we are now almost halfway towards our target of 100 store refurbishments in the current financial year," Chief Executive Willie Walsh said in a statement.
"The initial trading performance of these newly refurbished stores has been encouraging - they are outperforming comparable stores in the estate, giving us confidence that where we invest we are able to drive a material improvement in performance. In addition, the introduction of new hard flooring sections in 26 stores, has contributed to a 15% increase in laminate/luxury vinyl tile sales," he added.
In the Rest of Europe, meanwhile, like-for-like sales in local currencies grew by 0.9% in the first half, having grown by 5.5% the year before, while total sales in local currencies slipped by 0.2%, having also grown by 5.5% the year before. In sterling terms, however, Rest of Europe total sales rose by 15%, after falling by 5.0% a year earlier.
Carpetright's full-year gross profit percentage guidance in the Rest of Europe is for a 100 to 150 basis points rise.
"Trading in the Rest of Europe continues to improve and is a little ahead of our expectations," Walsh said.
"As we enter the second half, we are looking forward to implementing the next phase of our refurbishment and rebranding programme as we continue our drive to update and revitalise the business. With the benefit of recent UK investment expected to flow through as the second half progresses, further significant refurbishment work already underway and a continued improvement in the Rest of Europe, our guidance for the year as a whole remains unchanged," he added.
Carpetright will release its first-half results on December 13.
Shares in Carpetright were trading down 3.2% at 189.50 pence on Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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