Carpetright has issued a profit warning following a post-Christmas trading period that was “significantly behind expectations”.
Full-year profits are now expected to be between £2m and £6m – a sharp drop from the previously estimated range of £13.8m to £16.5m.
Before Christmas, Carpetright cautioned that profits would be at the lower end of these expectations.
The retailer has been hit by a “severe decline” in footfall during the vital January Sales period as a result of rocky consumer confidence.
It has also faced stiff competition from the likes of market insurgent Tapi Carpets but insisted that its response to this new threat “continues to be effective”.
UK like-for-likes dropped 3.6% and total sales fell 4.5% in the 11 weeks to January 13. In the all-important post-Christmas period, flooring like-for-likes plummeted 7.1%.
In the 37 weeks to January 13, like-for-likes decreased 0.6% and total sales dipped 1.8%
Boss Wilf Walsh said: “Despite a positive start to our third quarter, we have seen a significant deterioration in UK trading during the important post-Christmas trading period.
“While average transaction values were up year on year, the number of customer transactions since Christmas was sharply down, which we believe is indicative of reduced consumer confidence.
“The severity of the decline in footfall over this key trading period and our more cautious view of the outlook for the balance of the year leads to a significant reduction in our full-year expectations.
“Against this background of a further deterioration in market conditions, we remain committed to driving through the improvements that are essential to the long-term repositioning of the business.”
Read more: Wilf Walsh – ’It’s not Armageddon’
In Europe, the picture was brighter. Like-for-likes were up 4.3% in the 11 weeks and 5.6% in the 37 weeks.
Total sales were up 5.1% in the 11 weeks and 6.4% in the 37 weeks in local currencies, but when converted into pounds, shot up 9.6% and 12.2% respectively.
Overall, group sales dropped 2.3% in the 11 weeks and grew 0.4% in the 37 weeks.