Carpetright shares plunge on yet another profits warning
Carpetright has issued its second profit warning this year and said it is in talks with its banks.
The retailer said conditions since January had “remained difficult” due to “continued weak consumer confidence”. Shares in Carpetright plunged more than a quarter to 57p, valuing Carpetright at just under £39m.
The company said it was in talks with its banks to ensure it complies with their lending terms, adding the banks “currently remain fully supportive”.
Carpetright warned in January that its full-year profits would be between £2m and £4m compared with previous expectations of £14m.
While like-for-like sales have improved since then, Carpetright said they remained negative.
Despite the upcoming key Easter trading period, Carpetright said that it now expected to report a small underlying pre-tax loss for the year to 28 April.
As well as discussions with its banks, Carpetright said it was also examining “a range of options to accelerate the turnaround of the business and strengthen its balance sheet”.
It said the process remains at an early stage.
Neil Wilson at ETX Capital said it could be forced to close some underperforming stores.
“The question is whether Carpetright is just on the wrong end of a cyclical slowdown, or whether there is a deeper structural problem facing this business: the answer is probably some of both,” he said.