The carpet and flooring specialist blamed “tough trading conditions” and “fragile consumer confidence” for its decline in the UK, with like-for-like (lfl) sales down 0.5%.
In an interim management statement released today, the company revealed a 3.8% decline in group sales for the 12 weeks to January 21, 2012. Total sales in Carpetright's European outlets, which incorporates the Netherlands, Belgium and the Republic of Ireland, fared slightly better, with a decrease of 0.1% and lfl sales up 0.3%.

The group says that, while its self-help initiatives are improving performance, its current pace of sales and the level of margin improvement it as seen, mean full year underlying pre-tax profit is expected to be lower than the current market expectations.

Carpetright chairman and chief executive Lord Harris of Peckham, said: "We have said in the past the like-for-like sales performance has been volatile, and this continues to be the case, with volumes remaining sensitive to levels of promotional discounting.

"Excluding sales from our insurance replacement business, which has been disappointing, our core retail business would have reported life-for-like growth of 1%."

The group is continuing to focus on a range of self-help initiatives, which most recently included a re-launch of its bed proposition in January. Lord Harris described the response to this effort as "encouraging" and added that 27 stores have now been refurbished.

Carpetright's gross profit margin declined 430bps in H1, although the company said this is expected to level out to around 300 bps in H2. The group is continuing efforts to lower its cost base, which it expects to be reduced by around £5m year on year.

Lord Harris added: "We are delighted that the actions taken in our rest of Europe operations are now delivering growth in like-for-like sales and an improvement in profitability. We are particularly pleased with the success of the recovery plan in the Republic of Ireland.

"Looking forward, I see no respite from the challenging environment over the next 12 months, but remain confident the group will emerge in a strong position to deliver future growth once consumer demand improves."

The company is predicting a tough final quarter, but says it is expecting its year end net debt to be around £43m, significantly less than last year's £65.7m. Carpetright's year end trading update is expected on April 24, 2012.