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Topps Tiles sales crash in Q4

A dramatic decline in its revenues since July has forced DIY retailer Topps Tiles to cut its full-year earnings estimates, in a trading update released this morning.

Plummeting consumer confidence was blamed for the poor sales performance which has seen revenues for the first seven weeks of its fourth financial quarter down a worrying 10.4 per cent year-on-year.

Demonstrating the sudden drop-off in consumer spending, the whole of the third quarter which ended on July 2nd 2011, saw just a 1.9 per cent fall in revenues when compared to the same period last year.

A statement from the retailer read: “Based on these trading levels management believes the full year earnings are likely to be below the current range of analysts’ estimates.

“We consider that a decline in consumer confidence is the key driver for this recent performance.”

In its last business update the firm anticipated no “material change to trading patterns over the final quarter of the financial year”, but worries surrounding the global economy and fears following the UK riots seem to have changed the situation in a short space of time.

Topps Tiles had previously announced plans to expand its store portfolio by an additional seven outlets by the end of this financial year, taking its total number of shops to 320.

Today’s statement continued: “Management will continue to push forwards with the strategy previously outlined in order to protect and grow our market leading position.

“This will include driving gross margin gains through increased direct sourcing, further developing the customer offer, growing our store estate and continuing to invest in marketing the best range of tiles in the UK.

“We will also maintain our focus on prudent cost controls and improving operational efficiencies wherever possible.”

Source : John Whiteaker - Retail Gazette

25 August 2011
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