Wickes Group PLC (LSE:WIX) downgraded its full-year profit forecast as the cost-of-living crisis takes its toll on consumers.
The home improvement retailer is now forecasting adjusted pre-tax profits for the current year of £72mln-£82mln, down from its previous forecast of £83mln and below the £85mln recorded in the year to 1 January 2022.
In a trading update for the half-year to 2 July 2022, Wickes said total like-for-like (LFL) sales were up 0.8% against strong comparatives for the prior year. In the second quarter, LFL sales grew 5.4%, reflecting improvement in both the core and Do It For Me (DIFM) businesses.
“Our local trade business continues to perform well benefitting from its market-leading value proposition; however, we have seen signs of softening in DIY and DIFM markets in recent weeks,” the company said.
Core LFL sales for the second quarter were down 0.2% compared with the same period last year, an improvement on the 11% decline in the first quarter of this year. First-half core LFL sales were down 5.5% on last year, but 36.3% ahead of three years ago, before the Covid-19 pandemic struck.
Wickes said DIY sales remain below last year, although activity is ahead of pre-Covid levels. However, there have been signs of the market weakening in recent weeks, it cautioned.
DIFM LFL sales grew by 29.7% year-on-year in the first half. The company said there has been “some slowing” of new orders in recent weeks, but stressed that conversion remains good, cancellations are low and the order book is strong.
It said it is managing rising cost inflation by raising prices.
Chief executive David Wood said “we remain watchful of the macroeconomic backdrop and are managing the business appropriately to navigate these external pressures”.