28th Jan 2014 07:45
LONDON (Alliance News) - Carpetright PLC said Tuesday it now expects its full-year underling pretax profit to miss the lower end of current market expectations, due to further weakness in its Dutch business, which already swung to a loss earlier in the financial year.
In a second profit warning since the group issued one back in October last year, the carpet and floor-coverings retailer said that while trading improved at its UK business during the third quarter, which is the 13 week period to January 25, sales continued to decline steeply at its Dutch business.
In its December trading statement, the retailer said that it has been implementing a number of turnaround measures to help keep the business on track, including modernising its stores, adjusting its store portfolio, as well as boosting its online sales.
In Tuesday's trading update, Carpetright said UK like-for-like sales increased by 1.9% in the third quarter, whilst total sales were up 0.6%. It said that during the period its continued to reduce and modernise its store space in the UK, and is now trading from a total of 473 stores across the UK, 242 of which have now been modernised.
"UK profit is in line with our expectations and is expected to be ahead of last year for the year as a whole," said Executive Chairman Lord Harris in a statement, adding: "In the UK, the pace of the recovery remains uncertain in the face of continuing sales volatility, but we are confident that our self-help measures have further potential."
Carpetright's European business - which comprises of the Netherlands, Belgium and the Republic of Ireland - saw total sales decline by 7.5% during the quarter, and like-for-like sales fall by 7.7%, in local currency terms. However, the group said that its business in Belgium and Ireland continue to trading in line with expectations.
"Trading in our Rest of Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. As a result we now expect this business unit to be loss making for this financial year, although we still expect it to remain cash generative," Lord Harris said.
The group said it intends to released its full-year results for the financial year ending April 26 on June 24.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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