Carpetright has issued a profit warning following a poor performance in the important post-Christmas period.
In a trading update for the 11 weeks ended 13th January 2018, Carpetright reports that trading has been "significantly behind expectations', with total group sales down -2.3% – prompting the retailer to issue a more cautious outlook for the rest of the year.
According to the report, UK trading was impacted by lower customer footfall, with transaction numbers down significantly YoY.
LFL sales declined by -3.6% in the 11 weeks, with a decrease of -1.4% within the flooring category, and a further material decrease in bed sales.
Chief executive Wilf Walsh says: “Despite a positive start to our third quarter, we have seen a significant deterioration in UK trading during the important post-Christmas trading period. While average transaction values were up YoY, the number of customer transactions since Christmas was sharply down, which we believe is indicative of reduced consumer confidence.
“Our response to the threat of new competition continues to be effective, with those stores that have traded against new local competition for more than 12 months performing ahead of the rest of our estate.
“Sales in our Rest of Europe business have also been volatile but we continue to deliver LFL sales growth, primarily reflecting the introduction of lower margin service income.
“The severity of the decline in footfall over this key trading period and our more cautious view of the outlook for the balance of the year leads to a significant reduction in our full-year expectations.
“Against this background of a further deterioration in market conditions, we remain committed to driving through the improvements that are essential to the long-term repositioning of the business.”
Four stores were opened and 14 closed in the finanacial year to date, giving a net reduction of 10 and leaving 416 trading locations.
