Fresh blow for Carpetright profits

Carpetright, which has 501 stores in the UK, said sales remained volatile and sensitive to promotions, meaning profits for the year to April 28 were likely to come up short of even the most pessimistic of City forecasts.

Despite the difficult weather conditions of a year ago, Carpetright’s like-for-like sales were down 0.5 per cent in the 12 weeks to January 21, while margins continue to be impacted by the need for discounting.

In December, Carpetright slid to a bottom-line loss of £800,000 for the six months to October 29, compared to profits of £9.8m a year earlier.

This led analysts to forecast a full-year profits figure of between £8.8m and £11.9m but this is now likely to come down to around £8m following today’s latest profits warning. Shares opened seven per cent lower.

Seymour Pierce retail expert Freddie George said the warning dashed recent tentative hopes that the company was showing signs of recovery.

He added: “The big ticket, housing related markets, however, continue to struggle with the housing market in its fourth year of weak transaction numbers.”

The continued pressure on trading in the UK, where total sales were down 4.8 per cent in the quarter, was partially offset by its businesses in the Netherlands, Belgium and Ireland, with sales up 0.3% on a like-for-like basis.

Lord Harris, Carpetright’s chairman and a veteran of the retail sector with more than 50 years experience, remains encouraged by the relaunch of the company’s bed offer and the performance of recently refurbished stores.

He added: “Looking forward, I see no respite from the challenging environment over the next 12 months but remain confident the group will emerge in a strong position to deliver future growth once consumer demand improves.”