Carpetright Sales Slide as U.K. Heat Wave Halts Home Renovations
Carpetright Plc, (CPR) the U.K.’s largest carpet and flooring retailer, saw second-quarter sales slump after the longest heat wave in 18 years deterred Britons from home renovations.
Sales at U.K. stores open at least a year declined 1.9 percent for the period ended July 20, with total revenue in the country falling 3.3 percent, the Purfleet, England-based company said today. That marked a reversal from gains in May and June.
The heat wave has reduced Carpetright’s chance of reversing three years of declining sales. The retailer is seen boosting revenue by 2.1 percent in 2014, according to the average of 10 analyst estimates compiled by Bloomberg, helped by a store modernization program and an increasing share of the market.
The quarterly sales decline was “entirely attributable to a hot July,” Warwick Okines, an analyst at Deutsche Bank AG in London, wrote in a note to investors. He maintained his sell recommendation with a share price estimate of 560 pence.
Temperatures in the U.K. have topped 28 degrees Celsius (82 degrees Fahrenheit) for 17 consecutive days, according to the U.K. Met Office, the longest hot spell since 1995.
The decline in U.K. sales was “compounded by a period of strong, wet weather assisted, comparatives in 2012”, Chief Executive Officer Darren Shapland said in the statement.
Carpetright declined as much as 3.2 percent to 660 pence in London trading and was at 665 pence at 10:30 a.m.
Sentiment toward the U.K. housing market is “good,” though the company is “yet to see any real results and probably won’t see them until autumn if there is a step up,” Finance Director Neil Page said on a conference call.
Carpetright’s rest of Europe division, which makes up about a fifth of revenue, was hurt by “extremely difficult economic conditions” in the Netherlands, CEO Shapland said.
Sales at the unit, which also comprises businesses in Belgium and Ireland, fell by 11 percent, amounting to a 4.4 percent fall after currency shifts.
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