Summer sales give Topps the blues

The UK’s largest tile and wood flooring specialist saw its shares slump 22 per cent after it said the downturn was likely to leave it short of City profit forecasts.

Like-for-like sales were down by 10.4 per cent in the seven weeks to August 20, faster than the decline of 1.9 per cent seen over the previous 13 weeks.

Topps, which has more than 300 UK stores, said: “We consider that a decline in consumer confidence is the key driver for this recent performance.”

Analysts said low levels of housing transactions and increased competition from the big DIY chains were also impacting on Topps’ performance.

Kate Calvert, an analyst at Seymour Pierce stockbrokers, has retained a sell recommendation and said the City’s forecast for annual profits of £15.5m would now be reduced to between £11m and £13m.

She added: “We expect the housing market to remain subdued for the rest of the year and next, there is limited scope for material cost savings, and competition is intensifying both from the DIY sheds and the increasing number of home stores.”

In June, Topps reported adjusted profits of £7.2m for the 26 weeks to April 2, against £7.8m during the equivalent 27-week period a year earlier.

Leicester-based Topps said: “Management will continue to push forwards with the strategy previously outlined in order to protect and grow our market leading position.”