Carpetright disappointed the City with its second-quarter update on Wednesday. The floorcoverings market leader suffered from unsettled consumer confidence and lower mortgage approvals.
Like-for-like sales in the UK and Ireland slid 7.3%, while total sales fell 4.6%. The 584-store retailer expects tough trading conditions to continue next year.
Arden analyst Nick Bubb said the performance was “very poor” and noted that Carpetright did not comment on its profits outlook.
Execution Noble analyst Sanjay Vidyarthi said: “While we expect Carpetright to retain its dominant market position and to benefit from any cyclical recovery in the housing market, this is a mature retailer in a relatively low-growth market.”
KBC Peel Hunt analyst John Stevenson cut his full-year profit forecast to £28.2m from £31.7m, but acknowledged: “As housing transactions recover over the medium term, so Carpetright will benefit from the upswing.” Carpetright’s group sales dropped 5.2% in the 12 weeks to October 23.
At the European arm, comprising the Netherlands and Belgium, like-for-like sales were down by 1.2%.
Carpetright chairman and chief executive Lord Harris said: “The further reduction in mortgage approvals along with fragile consumer confidence has produced a difficult market. We expect these market conditions to continue into 2011.”