Topps Tiles Plc (LON:TPT) enjoyed a strong three months to the beginning of July, with its range of XL tiles and a new online brochure service boosting sales.
In the 13 weeks to July 2, the third quarter of the company’s financial year, the tiles seller saw like-for-like sales rise 6.2% compared with the same period a year earlier.
The company added that sales from recently launched lines, including an XL range of tiles, accounted for 8.8% of total sales in the period.
“Our focus on the successful strategy of ‘out-specialising the specialists’ has enabled to deliver healthy like-like-for-like sales growth of 6.2% in the third quarter,” said chief executive Matthew Williams.
The solid quarter comes off the back of a strong first half of trading for Topps, which saw like-for-like sales increase by 4.7% compared to the first six months of 2015.
The company did caution that like-for-like sales were affected by the early Easter this year, estimating that the figures for the third quarter would’ve been around 0.6 percentage points lower had Easter have fallen later on in the year.
Although Easter might be thought of as prime redecorating season, the loss of two trading days generally makes the quarter in which it falls less profitable for companies.
With regards to Brexit, the firm said that it was too early to tell if the vote has had any effect on trading, but added that it remained “confident” in the longer-term outlook of the business.
Broker Liberum said that the growth in like-for-like sales emphasises “the strength of the Topps brand and business”, and says the company is “clearly well-placed to continue to take market share”.
Liberum repeated its ‘buy’ recommendation and 130p price target.
Another broker, this time Cantor Fitzgerald, says the company has a number of positive drivers which “should lead to positive underlying earnings growth over the medium term.”
Cantor also repeated its ‘buy’ recommendation for Topps, although it trimmed its target price to 145p from 160p due to the “recent sector correction.”
Shares were down 4.75p, or 5%, to 96.75p.