Topps Tiles Plc (LON:TPT) moved higher on Wednesday after a pick-up in like-for-like sales in the second quarter left the retailer on track to beat first-half profit forecasts.
Like-for-likes climbed 1.8% in the three months to the end of March, although Topps bosses said the rise was largely down to the effect of the Beast from the East on last year’s performance and the later timing of Easter this time around.
READ: Topps reports revenue shrinkage in first quarter as UK retail sector drags
Easter is typically not helpful for retailers as the bank holidays reduce their number of trading days.
Like-for-like sales, which strip out the impact of new and closed stores, were up a more modest 0.2% in the second half as a whole.
Including closed stores, total revenue for the 26 week-period dipped to £108.8mln (£109.4mln).
Analysts at Peel Hunt said the performance was better than they had expected and means first-half profits will likely beat current market estimates.
“With a stable sales line, steady progress on gross margins and tight cost control, Topps looks well-placed to deliver quite a decent bounce back in profitability,” read a note to clients.
“Based on today’s update, we can see H1 profit before tax of £7.9mln, up 10% year-on-year, stronger than we had originally expected.”
Boss ‘encouraged’ by recent performance
Chief executive Matthew Williams said: “Developing and reinforcing our specialism in tiles is at the heart of our growth strategy,” said chief executive Matthew Williams.
“I am encouraged by our overall performance in the first half and believe the successful execution of this strategy is enabling us to outperform the overall tile market.
“Our commercial business is growing at pace and we remain open to opportunities to accelerate its expansion.”
Shares rose 2.7% to 76p on Wednesday.