Carpetright Share Price (CPR)

Yet after one month of 2013 General Retailers languishes in thirty-fourth place in the FTSE All-Share performance rankings as the reality of the long haul facing the cash-strapped consumer reasserts itself at the forefront of investors' minds. In a stark demonstration that bricks and mortar retail will not be propped up in the face of the migration to online retail and digital products, three major high street brands have already called in the administrators. Further failures are expected, consumer confidence may continue to falter and consensus forecasts could prove far too optimistic.

Yet these positives were overshadowed by a very disappointing turn from the Rest of Europe. Same-store sales fell 11.5% as solid performances in Belgium and the Irish Republic were more than offset by weak demand patterns in Holland. Broker Execution Noble believes June's full-year figures will show taxable profits of £8.4 million for earnings of 9.3p per share. Based on those estimates, the shares are selling on a lofty 73 times prospective earnings. Since profits could well take a long time to catch up with this valuation,........BUT AS ALWAYS DYOR good luck.......

Exposure to weak consumer demand for 'big ticket' purchases and moribund European housing markets, not to mention a lofty valuation, are key reasons to sell Carpetright (CPR). Last week (29 January), the recovering European carpet and floor coverings seller, with form in disappointing the market, actually posted a better-than-expected third quarter update. Over the 13 weeks to 26 January, the £456 million cap's busiest period of the year, UK like-for-like sales grew 3.2%, with total sales up 1.6% on the retailer's home turf. Darren Shapland, who took over as boss of the Purfleet-headquartered business from founder Lord Harris of Peckham last May, attributed the upturn to momentum behind self-help measures.........

"Gross margin for the period has been in line with our previously announced expectations and our guidance of a full year gross profit percentage improvement in the range of 200-250 basis points above the prior year, remains unchanged," he added. Shapland said the group's focus in the Netherlands is on protecting profit in what remains a very weak consumer environment. Otherwise results for the year to date are in line with management's expectations. "Whilst trading conditions remain challenging, we have good momentum in our self-help initiatives. That said, as ever, our performance in the final quarter will be critical to the outcome for the year as a whole."

Carpet and floor coverings retailer Carpetright said store refurbishments and an expansion to its laminate floor and bed ranges helped drive domestic sales in the third quarter. Like-for-like (LFL) sales in the UK increased by 3.2% and total sales in the UK increased by 1.6%. LFL sales in the Netherlands, Belgium and the Republic of Ireland, fell by 11.5%. Total sales declined by 11.2%. Carpetright said the solid performance in Belgium and the Republic of Ireland was offset by continued weakness in the Netherlands. Chief Executive Darren Shapland said: "We believe this performance reflects the success of our programme of self-help initiatives, including the development of our bed business, introduction of our laminate range to more stores and the ongoing programme of store refurbishments, all of which gained momentum in the period."

At an April 2013 earnings multiple of a staggering 66.7 times, falling to 41.7 next year and 27.5 in 2015, Carpetright shares are defying gravity, says The Telegraph´s Questor team. Sure profits will recover – but even if they went to up their peak earnings per share of 71p achieved in 2005, the shares would still be on a multiple of 9.6 times, it quips. This would be a more appropriate earnings multiple of this stage in the cycle, but it will clearly be years before that level of profitability returns – if it materialises at all. So why are they on such a heady rating? Well the shares are tightly held, with founder and current chairman Lord Harris of Peckham and his family owning almost 30pc. It even has Bill Gates as a shareholder.