Topps Tiles sales fall
Published: 02 June, 2011
LEICESTER: Shares in Topps Tiles reported that "subdued" consumer confidence had reduced sales prompting it share price to fall over 5% yesterday.
Like-for-like sales fell 2.1% in the first seven weeks of Topps' second half.
In the 26 weeks to April 2, group revenues fell to £89.2m compared with £91.4m in the 27-week period last year.
"No retailer likes to use the weather as an excuse, but the correlation with our business is pretty well documented," said Rob Parker, the company's finance director.
Sales in May were stronger than in April, as customers had deferred home improvements to spend more time in the garden, he said.
A sluggish UK housing market, an unsuccessful foray into the Netherlands and dwindling consumer sentiment have taken their toll on Topps Tiles over the past few years. The retailer has responded by raising its profile through a national TV advertising campaign that increased costs by £1.3m in the first half.
Analysts' consensus forecasts for full year pre-tax profits moved down from £17.5m to £16.5m on news of the slowdown in sales. David Jeary, retail analyst at Investec, said the decline in like-for-like sales was "worse than expected".
"The low level of housing transactions and consumer confidence remains a drag on Topps' short-term prospects, and there remains little substantive evidence of a strong 'don't move but improve' trend to help counteract this," he said.