Shares in Carpetright (LSE: CPR) fell 3% in early trade this morning, following the release of the company’s interim management statement for the first quarter.
The weather played a major factor, with July’s heatwave offsetting the quarter’s positive start as customers elected to spend their time and money away from the house. In contrast, last year saw strong “wet-weather-assisted” comparatives, which led to a 1.9% decline in like-for-like sales this year, and a 3.3% fall in total sales.
The UK’s largest floor-coverings retailer also has problems in the Netherlands, which is seeing “extremely difficult” economic conditions currently, which contributed to like-for-like sales in the Rest of Europe — comprising Netherlands, Belgium and the Republic of Ireland — falling 10.6% year on year, and a decline of 10.9% for total sales.
Chief executive Darren Shapland commented:
“We saw solid growth in UK sales during May and June, reflecting the continued progress of our self-help activities. During July this positive trend was reversed by the significantly warmer weather. Excluding the expected decrease in sales from the wholesale business during the 12 week period, our core retail business would have reported a like-for-like sales decline of 1.0%.
“Notwithstanding the tough trading conditions, we believe we continue to grow market share in all of our markets and continue to see significant further potential in our planned self-help initiatives.”
Carpetright did see gross margin increase 80 basis points in the UK during the period, and 100 basis points across Rest of Europe, while the firm has also continued its plan to refurbish stores, with 202 of 473 (Q4 2012-13: 478) now modernised.
Today’s results were disappointing, especially after positive news from Carpetright’s preliminary results released at the end of June contributed to a sharp rise in the shares, bringing them up 10% from their price 12 months ago after they were down -5% only last month.
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> Sam does not own shares in Carpetright.
