Britain's largest floor coverings retailer Carpetright forecast full-year 2017-2018 profit towards the bottom end of market expectations, saying consumer confidence remained fragile and competition intense.
The firm, whose fortunes are closely tied to the strength of the housing market, said it had made a pretax profit of £2.1 million (€2.4 million) in the 26 weeks to October 28th, down from £5.1 million in the same period last year, despite revenue rising 2.6 per cent to £228.1 million.
Carpetright had said in October that first-half profit would fall short of the same period last year, though it forecast a better second half.
UK like-for-like sales increased 0.7 per cent in the first half and rose 1.4 per cent in the six weeks to December 9th.
In the Rest of Europe division – made up of the Netherlands, Belgium and Ireland – first-half like-for-like sales increased 6.5 per cent and were up 9.2 per cent in the first six weeks of the second half.
British consumers’ discretionary spending is under pressure from rising inflation, subdued wage growth and ongoing uncertainty in the UK economy.
Squeezed British consumers reined in Christmas travel plans and bought fewer new cars last month, setting the stage for the first fall in festive spending in five years, credit card company Visa said on Monday.
"While trading over the first six weeks of the new period has been encouraging . . . in light of the consumer outlook we are taking a more cautious view of the second half and now expect underlying profit before tax for the full year will be towards the bottom end of the current range of market expectations," said chief executive Wilf Walsh.
Prior to Tuesday’s update analysts were forecasting £13.8-16.5 million, compared with £14.4 million in 2016-2017.
Shares in Carpetright, up 23 per cent so far this year, closed on Monday at 185 pence. – Reuters