Topps Tiles PLC (LSE:TPT) shares fell 6% to 32p after the retailer published a trading update revealing January started slowly, but volumes built through February and March.
Overall, group sales increased 4.0% to £127.7 million for its half-year to 29 March 2025, with underlying sales growth of 4.4% in the second quarter.
Underlying core like-for-like sales increased 3.7% in the second quarter and for the whole six months were up 3.0% on the same period a year ago.
The company said a "focus on rebuilding profitability, including a review of product pricing, product mix and discount structures has, in recent weeks, delivered a strong improvement in gross margins, despite the continued increases in trade mix".
Analysts at Peel Hunt said: "Our sense is that this growth is more attributable to market share gains rather than consumer recovery."
They noted that Topps' profit is typically heavily weighted to the second half, this year has seen investments in systems, marketing platforms, and the opening of a new distribution centre for Pro Tiler and CTD.
While the broker is leaving its full-year forecasts unchanged, it expects first-half pre-tax profit to come in below last year’s £3.1 million and said the full-year outcome "is contingent on the sales recovery continuing into 2H, along with the improved margin position, which introduces an element of downside risk to forecasts".