Carpetright revealed underlying profits fell by a third to £3m in its half-year to October 26. Retail Week takes a look at reactions from the analysts.

On the UK side of the business, Carpetright’s tighter financial control, alongside a further eleven store closures in the period, has gone some way to offsetting the margin squeezing effects of promotional activity and competitive discounting, with Carpetright also working to improve its product sourcing and promotional planning. Carpetright is taking proactive measures to improve its performance, and we believe that the retailer has both the strength in management and finance needed to secure its future. It is under no illusions that it will continue to face tough trading conditions in its second half, but it is well placed to overcome these, thanks to its sensible and sustainable self-help measures. The UK side of the business is likely to slowly return to more robust health, thanks to an improving economic climate and housing market - Greg Bromley, Conlumino

Although the company will benefit from self-help initiatives (extending the offer into beds, laminates and luxury vinyl tiles, broadening carpet range into higher price points as well as the on-going refurbishment programme) and the UK housing market and mortgage approvals have shown some encouraging signs, we are reiterating our sell recommendation. We have concerns that the company has successfully fought off all its multiple competitors and we believe its new refurbished format is not effective enough against the independents. It is too focused on price, in our view, and not aspirational enough for mainstream customers – Freddie George, Cantor Fitzgerald

While encouraging, trading has been volatile, with a poor July preceding a relatively good August, followed by a particularly tough September, hence we are not prepared to extrapolate the stronger performance enjoyed over October. However, we take comfort that management remains confident of meeting full year expectations and note the improving housing market backdrop – John Stevenson, Peel Hunt

Carpetright issued a profit warning on 4 October, when UK LFLs were down 2.2% in the first 22 weeks of the first half. The past four weeks have seen an improvement to c. +6.9%, which is encouraging but clearly over a very short period – Sanjay Vidyarthi, Liberum Capital

October’s profit warning combined with the news of [chief executive] Darren Shapland’s surprise departure was initially hard to digest. However, with responsibilities reallocated, and Lord Harris back as executive chairman, execution of key strategic initiatives should continue unaffected – Mark Photiades, N+1 Singer