Carpetright warning as sales disappoint

The group's shares plunged 14 per cent in the wake of its profits alert, which comes as a blow to the group after tentative signs of a revival at the end of 2009.

Carpetright said comparable sales across the UK and Ireland rose 1.4 per cent in the seven weeks to March 20, down again on the 2.3 per cent growth seen in the third quarter.

"The pace of recovery seen towards the end of 2009 has not been sustained and whilst group profits for the year to May1, 2010 will be considerably ahead of last year, they are likely to fall below current market expectations," said Carpetright.

Sales had bounced back last year, rising by an encouraging 3.9 per cent in the group's first half because of improved trading conditions and following the demise of competitors such as Allied Carpets.

However, growth slowed as sales suffered during the freezing weather conditions at the start of the year.

Lord Harris of Peckham, chairman and chief executive of Carpetright, said: "Based on previous experience, we expected to recover some of this lost trade in the remaining weeks of the year.

"It is now clear that recent like-for-like sales growth, while remaining positive, has not returned to pre-Christmas levels and the recovery from weak trading in January has not been as significant as expected."

Carpetright has around 600 stores across the UK and Ireland, as well as around 120 in Europe.

It said its businesses in The Netherlands and Belgium continued to

trade well, with like-for-like sales up 1.6 per cent in constant currency.

Analysts at Numis Securities reduced their annual profits forecast for Carpetright by 9m to 30m.

They added: "Carpetright is still a very high quality operation but it seems that, reflective of the wider UK economy, it is going to take longer for the business to climb out of this recession than we had expected."

Carpetright was founded in Canning Town, London, in 1988. It recently branched out from flooring to sell beds as well, following the takeover of Sleepright in December 2008.