Carpetright has warned on profits for the third time in as many months as it kicks off talks with lenders to ensure compliance with its existing loans.
The flooring specialist said that it expects to report a “small underlying pre-tax loss” in its current financial year due to poor UK sales.
The retailer said that its UK like-for-like sales have remained in negative territory and “below management expectations” since its last profit warning in January, when it predicted profits would come in between £2m and £6m.
Carpetright said that its European sales in the subsequent period have improved, bolstered by a recovery of like-for-like sales momentum in the Netherlands, but warned that would not offset declines in its domestic market.
As a result of its ongoing sales difficulties, the flooring specialist said it has “proactively engaged in constructive discussions with its bank lenders in order to ensure it continues to comply with the terms of its prevailing bank facilities.”
The retailer insisted that its lenders currently remain “fully supportive” of the business.
Carpetright said it also “examining a range of options to accelerate the turnaround of the business and strengthen its balance sheet,” and that it will update the market on this strategy in due course.
The retailer’s current financial year ends on April 28.