Shares in the Group fell 42% after reporting a "sharp deterioration" in UK trade.
Companies: Davide Campari-Milano N.V.
Carpetright (LON: CPR) has issued a worrying trading update today, outlining its crucial post-Christmas trading period results which saw a sharp deterioration in footfall and sales.
Shares fell 42% when the markets opened on Friday morning after Management warned on profits due to a fall in Group sales. This has led to revised full-year profit guidance of between £2m and £6m.
According to consensus data on Stockopedia, the Group was previously forecast to report a Net Profit this financial year of circa £10m, so this is quite a downgrade.
Trading in the UK during the important post-Christmas has been "significantly behind expectations" Management said, with like-for-like sales in its core flooring market down 7% on the same period last year.
Despite like-for-like sales slightly up in its European operations, total group sales for the 11 week period were down 2.3%.
Group CEO Wilf Wash was honest in his outlook for the short-term:
"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. ...
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."
Today's profit warning is the Group's second in less than six weeks after the Group warned on full-year profits in its lacklustre H1 18 results.
Singers said in its note this morning:
"Given the slump at the start of the important winter trading period, management has indicated guidance for FY PBT will be in the range £2-6m (compared to consensus/N+1E £14m). Given the working capital dynamics, cash flow will likely deteriorate too. Earlier forecasts for period end debt of £30m will likely widen to c£40m. This is still well within the banking facility of £55m though, and the group retains freehold property assets valued at c£60m."