Carpetright’s share price drops by a fifth as company warns knock to consumer confidence likely due to Britain leaving the EU
Home furnishings specialist Carpetright warned consumer confidence would be hit by last week's referendum.
The company's shares were down 8.40 per cent this morning after it announced sales in the UK fell one per cent in the eight weeks to 25 June.
Chief executive Wilf Walsh said today that "the outlook has been further complicated by the outcome of last week's EU referendum" and "we are cautious about the impact the associated uncertainty will have on consumer confidence".
May was a particularly tough month, as like-for like sales fell 7.6 per cent, before rising 6.3 per cent in June.
The company's share price has dropped by a fifth after the firm's yearly results were released this morning.
The figures
Carpetright posted a strong rise in profits before tax, up 33.1 per cent to £17.3m from £13.0m at the end of last year.
For the 52 weeks to 30 April, the group's revenue was down 1.3 per cent, falling from £462.6m to £456.8m.
Carpetright's earning per share rose to 19.3p from 13.7p, an increase of 40.9 per cent.
UK like-for-like sales were up 2.8 per cent, and sales growth in the rest of Europe was 4.8 per cent.
Why it's interesting
Retail analyst Nick Bubb said the company's results show "a solid recovery" in profits before tax, but that the City will have it's eyes on chief executive Wilf Walsh's comment today that "the outlook has been further complicated" by the UK's Brexit vote.
The company has been testing out a new store format, and says there has been a "positive customer reaction" so far. The new brand will be introduced on 1 July.
The group has also been spending money on refurbishing its stores; 100 stores are set to be complete in the next 12 months at a cost of £10m.
This is part of a turnaround for the company that began under current chief executive Wilf Walsh, who took over the business from Lord Harris last year.
Under Walsh, the floorings and beds retailer has been trying to furnish its multi-channel offer and open smaller stores in more central, high-street locations.
What Carpetright said
Wilf Walsh, chief executive, said:
Trading conditions in the early weeks of the new financial year have been more challenging, against strong comparatives in the prior year and in a market which is increasingly competitive, particularly in the UK.
The outlook has been further complicated by the outcome of last week's referendum and we are cautious about the impact the associated uncertainty will have on consumer confidence.