Topps Tiles reported a 4.9% rise in second-quarter like-for-likes, but growth was dented by the timing of Easter. Here is the City’s reaction.

“Range innovation and constant newness is becoming an increasingly significant competitive advantage for Topps Tiles.

“We note like-for-like sales growth is driven by both increasing volumes and rising average transaction values, as customers buy into added-value ranges and become increasingly design conscious.

“The development of the boutique format stores has generated many new ideas for in-store merchandising, fixtures and the general look and feel of the store space.

“We can envisage a scenario where the look and feel of core stores and boutique stores progressively merge into a consistent format. The implication here is that there is an opportunity for a more extensive refit of the core estate, if the trials of new initiatives continue to deliver improved sales performance.” – John Stevenson, Peel Hunt

“Topps’ update shows a business in good health. While UK consumer confidence may not be as robust as it was a year ago Topps has a solid self-help strategy based on up to 100 further store openings and a move into the small business market.

“The EBIT margin remains 50% below 2006 peak and we see scope for a 250 basis points improvement over the next five years.

“Topps has grown organically through a measured store roll-out programme and and has taken its share of the UK domestic tile market to around 33%. We believe that the company could open around 100 more stores, including in the boutique format.” – Tom Gadsby, Liberum

“The strategy of “out-specialising the specialists”, seems to be paying off. A reasonable increase over the previous year, although falling below last year’s increase due to the timing of Easter, would suggest things are positive for Topps Tiles.

“The stores that have been modernised are much more appealing. But there is still a long way to go, and with the takeover of Homebase by Australian conglomerate Wesfarmers, will it be enough?

“There is no doubting Topps tiles products and ranges, but will they be able to keep their customers from the impending DIY market shake-up?” – Paul Thomas, Retail Remedy