Carpetright profit warning on 'disappointing' bed sales

Carpetright has cut its profit forecast for the year to between £3m and £4m on "disappointing" bed sales and weak consumer confidence in Europe.

The retailer had warned in January that it saw no respite from challenging conditions over the next year. At the time analysts revised profit forecasts down to £6m for the year to April 2012.

But those estimates have been slashed yet further this morning as a trading update showed that sales fell 3.2pc in the UK and 4.7pc across Europe in the 11 weeks to April 14. Lower revenue in The Netherlands and Belgium was put down to weakening consumer confidence and lower footfall caused by the eurozone debt crisis.

Carpetright launched a new range of beds early this year but sales improved only "marginally" on the previous line-up and fell below management expectations. Bed sales account for just 6pc of total revenue but the shortfall has had an impact on profit. The group now estimates profit before tax for the year to April 28 will be between £3m and £4m.

The chief executive of Carpetright, Lord Harris of Peckham, said that the carpet market was "weak and volatile" but that the business was cautiously optimistic that the gradual growth seen recenty would continue into next year.

"In contrast to this, bed sales, while still showing growth, have been below management expectations and tougher trading conditions in The Netherlands and Belgium have also contributed to a weaker Group result for the final quarter," he added.

The company will release its preliminary results for the year to April 28 on June 26.

The full pre-close trading statement can be found in the Industry Articles section of this website.

Source : Matthew Sparkes – The Telegraph
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9222556/Carpetright-profit-warning-on-disappointing-bed-sales.html