Challenging economic conditions have left their mark on retailer Carpetright after the flooring chain reported a 28% drop in half-year profits.
The business, which has 584 stores in the UK and Ireland, added it remained cautious about conditions over the rest of this financial year and into 2011 after sales fell 4% to £248 million in the six months to October 30.
Despite the slide in underlying profits to £10 million, chairman and chief executive Lord Harris of Peckham said Carpetright was in a strong position to deliver sales growth when consumer demand in the sector returns.
Total revenues in the UK and Ireland declined by 2.7% to £207.6 million, with the figure down by 6.1% on a like-for-like basis. Underlying operating profits in the UK and Ireland fell by a third to £9.6 million, it added.
As well as fragile consumer confidence, Carpetright said sales of big-ticket, housing-related items were impacted by a low level of mortgage approvals.
Matthew McEachran, a retail analyst at Singer Capital Markets, said the figures were in line with expectations, although he highlighted concerns about the impact of recent weather conditions on trading figures.
He added: “We expect the snow to have had an adverse effect in recent weeks and whether or not this can be clawed back over the peak trading season remains to be seen.”