Carpetright issues another profit warning

27th Apr 2011 07:21

Carpet and floor coverings retailer Carpetright warned underlying pre-tax profit for the year is expected to be slightly below the level of profits achieved in the 2009 full year as tough trading conditions continued in the fourth quarter. Group sales for the 11 weeks ended 16 April 2011 fell by 6.5%. UK and Republic of Ireland sales declined 6.5% during the quarter, with like-for-like sales down 6.3%. In local currency terms, total sales in Rest of Europe, the Netherlands and Belgium, fell by 4.4% with like-for-like sales down 5.7%. After allowing for the movement in exchange rates, this translates to a total sales decline of 6.1%. Commenting on the group's performance, chairman Lord Harris of Peckham said, "Tough trading conditions in the UK and Republic of Ireland continued into the fourth quarter of our financial year, with fragile consumer confidence producing a weak floor coverings market. While the sales figures do not include Easter trading, we do not expect the trend up to the financial year end, 30 April 2011, to be materially different." Carpetright saw increases in raw material costs continuing in the final month of the quarter, leading to an acceleration of carpet price inflation. "While we have, where possible, looked to pass some of this increase on to customers, the ongoing difficult trading conditions have required us to hold sale prices on many lines. As a consequence, we now expect the total UK & Republic of Ireland margin will be flat year on year," the group said in a statement. Meanwhile trading conditions in the Republic of Ireland remain very difficult, with its sales falling by over 50% over the last three years. Carpetright said it remains well placed to capitalise on opportunities when economic conditions improve.CJ