19 Jan 2018 07:00
Carpetright plc
Trading Update
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces an update on trading for the 11 weeks ended 13 January 2018.
Key Points
· | Trading in the important post-Christmas period has been significantly behind expectations |
· | Total Group sales down 2.3% |
· | Sharp deterioration in UK trade has had a significant impact on profitability and our outlook for the reminder of the year |
· | Revised full year profit guidance in the range of £2.0m to £6.0m |
· | UK | |
o | UK trading impacted by lower customer footfall, with transaction numbers down significantly year-on-year | |
o | Like-for-like sales decline of 3.6% in the 11 weeks, with a decrease of 1.4% within the flooring category, and a further material decrease in bed sales (notes 2, 3) | |
o | Core flooring like-for-like sales decline of 7.1% since Christmas | |
o | Continuing to perform well against new competitors, with those stores having traded against new competition for more than 12 months performing ahead of the remaining estate | |
o | Gross profit margin guidance unchanged - a decline of between 40-80bps | |
o | Four stores were opened and 14 closed in the year to date, giving a net reduction of ten, leaving 416 trading locations | |
· | Rest of Europe (Netherlands, Belgium and the Republic of Ireland) | |
o | In local currency terms, like-for-like sales increased by 4.3% | |
o | Gross profit margin guidance unchanged - a decline of 400-600bps | |
o | Two stores were opened and four closed in the year to date, giving a net reduction of two, leaving 136 trading locations | |
Wilf Walsh, Chief Executive, 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.
"Our response to the threat of new competition continues to be effective, with those stores that have traded against new local competition for more than 12 months performing ahead of the rest of our estate.
"Sales in our Rest of Europe business have also been volatile but we continue to deliver like-for-like sales growth, primarily reflecting the introduction of lower margin service income.
"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."
The Group will issue a pre-close update on Tuesday, 24 April 2018 and will report its preliminary results for the financial year ending 28 April 2018 on Tuesday, 26 June 2018.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
For further enquiries please contact:
Carpetright plc |
Wilf Walsh, Chief Executive |
Neil Page, Chief Financial Officer |
Tel: 01708 802000 |
Citigate Dewe Rogerson |
Kevin Smith / Nick Hayns |
Tel: 020 7638 9571 |
Further information on Carpetright plc, including an alert service for latest company news, can be found at http://www.carpetright.plc.uk/
A copy of this trading statement will be available on our website from 7.00am today.
Notes
1. Consensus for the year ending 28 April 2018 is for Group underlying profit before tax to be £14.1m, with a range from £13.0m to £15.6m.
2. Sales represents amounts payable by customers for goods and services before deducting VAT and other charges.
3. Like-for-like sales calculated as this year's sales compared to last year's sales for all stores that are at least 12 months old at the beginning of our financial year. Stores closed during the year are excluded from both years. No account is taken of changes to store size or introduction of third party concessions.
Notes to Editors
Carpetright plc is Europe's leading specialist floor coverings and beds retailer. Since the first store was opened in 1988 the business has developed both organically and through acquisition within the UK and other European countries. The Group is organised into two geographical regions, the UK and the Rest of Europe (comprising The Netherlands, Belgium and the Republic of Ireland).
Appendix 1: Group Sales
Current Financial Year | Previous Financial Year | ||||
11 weeks to 13 Jan 2018 | 37 weeks to 13 Jan 2018 | 26 weeks to 28 Oct 2017 | 13 weeks to 28 Jan 2017 | 39 weeks to 28 Jan 2017 | |
UK | |||||
Total | (4.5%) | (1.8%) | (0.8%) | 0.8% | (3.4%) |
Like-for-like | (3.6%) | (0.6%) | 0.7% | 1.9% | (1.3%) |
Rest of Europe | |||||
Total (in local currency) | 5.1% | 6.4% | 11.4% | 5.4% | 2.2% |
Like-for-like (in local currency) | 4.3% | 5.6% | 6.5% | 5.2% | 2.4% |
Total (in GBP)
| 9.6% | 12.2% | 20.1% | 22.4% | 16.7% |
Group Sales (in GBP)
|
(2.3%) |
0.4% |
2.6% |
3.7% |
(0.7%) |
Appendix 2: Store portfolio
Current Financial Year | Previous Financial Year | |||||||
Store portfolio | 13 Jan 2018 | Interim 28 Oct 2017 | 28 Jan 2017 | Year end 29 Apr 2017 | ||||
Stores | Sq ft '000 | Stores | Sq ft '000 | Stores | Sq ft '000 | Stores | Sq ft '000 | |
UK | ||||||||
Standalone | 409 | 3,612 | 410 | 3,661 | 414 | 3,662 | 414 | 3,669 |
Concessions | 7 | 10 | 8 | 12 | 13 | 24 | 12 | 22 |
Total | 416 | 3,622 | 418 | 3,633 | 427 | 3,686 | 426 | 3,691 |
Rest of Europe | ||||||||
Republic of Ireland | 21 | 157 | 21 | 157 | 21 | 157 | 21 | 157 |
Netherlands | 92 | 960 | 92 | 957 | 94 | 969 | 94 | 975 |
Belgium | 23 | 228 | 23 | 228 | 23 | 235 | 23 | 228 |
Total | 136 | 1,344 | 136 | 1,342 | 138 | 1,360 | 138 | 1,360 |
Total Group
|
552 |
4,966 |
554 |
4,974 |
565 |
5,046 |
564 |
5,051 |