Topps Tiles has issued a profit warning, blaming a combination of worse-than-expected sales and the recent extreme heatwave for hitting its annual earnings.
The Leicestershire-based retailer reported a 1.8 per cent decline in sales for the three months to 27 June, with like-for-like revenues across its core Topps Tiles brand remaining flat and deteriorating as the quarter progressed.
The company noted a shift in customer demand towards lower-priced products amid broader economic uncertainty, with the intense heat at the end of June exacerbating these trading challenges.
A spokesperson for Topps stated: "Recent periods of extreme heatwave conditions led to temporary work stoppages among housebuilders and traders, further affecting activity levels. Whilst there is likely to be a catch-up over a six-month period, this is unlikely to come back fully in our financial year which ends in September."
Consequently, the group now anticipates underlying profits for the financial year ending in September to exceed £6.5 million, a significant drop from the £9.2 million recorded in the previous year.
Shares in the firm fell 8 soon after market opening on Wednesday.
Alex Jensen, chief executive of Topps, said: “Topps continues to outperform the wider market despite weaker consumer sentiment and an increased focus on lower priced products.
“We’re making significant strategic progress across our priorities and the self-help actions we are taking to support profitability are working and will position the business for long-term sustainable growth.
“In the short term, the macro-economic environment continues to remain challenging.”
The group has been slashing costs in the face of more difficult trading and in April announced 23 shops were being shut – 7 per cent of its 319-strong estate.
Store closures in its Topps and CTD brands have further put revenues under pressure.
Topps saw its deal to buy CTD out of administration probed by the Competition and Markets Authority (CMA), which required it to sell off a number of CTD stores to appease concerns.
The firm now has 23 CTD stores, down from an initial 31.
In December, it also bought the brand of collapsed rival Fired Earth in a £3 million rescue deal after the Oxfordshire-based competitor tumbled into administration in October, resulting in the closure of its 20 UK showrooms and 133 job cuts.
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