Topps Tiles will focus on brand building through more marketing as it seeks to outperform the market in its second half.
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The retailer, which has cornered about 25% of the tiles market, reported group like-for-likes increased 1.8% in the 26 weeks to April 2.
However, current trading has weakened. Like-for-likes slipped 2.1% in the first seven weeks of the second half.
“I don’t see any reason why we can’t keep outperforming”
Matt Williams, Topps Tiles
Topps Tiles chief executive Matt Williams said the bank holidays, the royal wedding and “unseasonably hot weather” hit trade in the latter period. However, he observed there had been an “improving trend throughout the seven weeks”.
Adjusted operating profit fell from £10.5m to £9.3m in the first half as the retailer invested in marketing and absorbed cost increases.
Group revenue fell from £91.4m to £89.2m, but that represented a 1.5% increase on a same reporting week basis.
Gross margin was 59.7% up from 58.8% as the retailer benefited from improvements in exchange rates.
Williams said the economic environment was challenging but added: “The economic climate won’t change but I don’t see any reason why we can’t keep outperforming.”
The 313-store retailer plans to open 10 new stores a year as it continues expansion.
Singer analyst Matthew McEachran said the performance was “broadly in line with our expectations” but that the beginning of the second half was weaker than expected.