Profits at Topps Tiles Plc (LON:TPT) plunged in the first half of its fiscal year, with the retailer blaming the ‘Beast from the East’ and the earlier timing of the Easter weekend.
Back in April, Topps warned that the adverse weather and a general “softening” of the underlying market had started to hit sales.
Bricks and mortar retailers have been under pressure from a shift towards online shopping and a slowdown in consumer spending as higher inflation and stagnant wage growth reduces disposable incomes.
READ: Topps Tiles cautious after Q2 sales drop
In a bid to attract more customers through its doors, the FTSE 250 company started to run more sales and promotions in the period, which helped the top line but squeezed margins.
Group revenue in the six months ended March 31 rose 3.7% to £110.5mln (H1 17: £106.6mln), but pre-tax profit fell by a third to £6.4mln (H1 17: £9.5mln).
“After a strong start to the year, market conditions became more challenging over the second quarter, when our like-for-like sales performance was also impacted by the adverse weather and the earlier timing of Easter,” said chief executive Matthew Williams.
“Against this background, our clear strategic focus, coupled with strong promotional positioning, enabled us to outperform the overall UK tile market.”
FY profit guidance unchanged
Analysts had speculated that a poor first-half performance could see Topps lower its outlook for the rest of the year, but that turned out not to be the case.
The company said it was “cautious” about the second half but still expects full-year profit before tax to be in-line with current market forecasts.
Trading in the opening few weeks of the second half has picked up slightly, with like-for-like sales down by 0.2%, compared with -2.2% in the second quarter.
Shares rose 2.9% to 71p at the opening bell on Tuesday.