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Carpetright FY expectations unchanged

Tuesday, 25th October 2016
Carpetright's full-year profit expectations are unchanged but it says trading conditions in the UK in the first half reflect variable consumer demand and increased competitive pressures.

Highlights:

UK - Like-for-like sales down 2.9%. (notes 2, 3)

- Full year guidance of a decline in gross profit percentage revised to between 150 and 200 basis points, a combination of increased sourcing costs resulting from the devaluation of sterling, competitive market conditions and a mix impact.

- 49 stores now trading under the new brand identity, delivering sales growth above comparable stores in the rest of the estate.

- One store was opened and seven closed in the year to date, giving a net reduction of six leaving 429 trading locations.

Rest of Europe

- In local currency terms, like-for-like sales in the Rest of Europe (Netherlands, Belgium and the Republic of Ireland) increased by 0.9%.

- Full year guidance of an increase in gross profit percentage maintained at between 100-150 bps.

- During the period, four stores were opened and four closed leaving 137 trading locations.

Chief executive Wilf Walsh said: "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, with investment in the first half weighted to the latter part of the period.

"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. We continue to make progress with our plans to reduce property costs.

"Trading in the Rest of Europe continues to improve and is a little ahead of our expectations.

"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."




Story provided by StockMarketWire.com

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