Topps issues profit warning as challenging trading conditions bite
Topps Tiles says its half-year profits are likely to be “materially below the bottom end of the current range of market expectations” after a challenging start to Q2.
The firm’s performance in Q1 was hampered by pre-election political and economic uncertainty, with like-for-like retail sales falling by 5.4 per cent.
Now, in a trading update for the eight weeks to 22 February, the Leicestershire company has reported a 5.5 per cent decline in retail sales which it has attributed to “continued weak home improvement spending.”
In a statement, Topps said it now expects its first half profits will be “significantly below the prior year level.”
CEO Rob Parker said: “Trading conditions in our second quarter have remained challenging, reflecting continued weakness in home improvement spending. Against this backdrop we are taking appropriate action to ensure we remain competitive, to reduce costs and to strengthen cash flows.
“While UK housing market indicators have shown an encouraging improvement in the period since the General Election, these traditionally have a lagged impact on our trading and we would not expect to see any benefit from these until later into the second half – our performance during this period will be key to the outcome for the year as a whole.
“We remain confident that our market-leading retail offer and recently established commercial operations give us a strong platform from which to deliver sustainable growth over the medium and long term.”