Carpetright third-quarter like for likes rise 2.4%: What the analysts say

“The company has launched a number of new and interesting initiatives over the last year. They include the offer of interest-free credit, a promotion which was strengthened in January 2016, a broadening of the categories and a strengthening of the assortment to include a stronger more aspirational and contemporary range.

“It has also started to test a new retail concept, which we believe is an improvement on the existing format.

“These initiatives, however, we believe, are not enough to move the dial while competition is intensifying following the roll-out of Martin Harris’s Tapi concept and gross margins are declining in a relatively benign macro-economic environment.” – Freddie George, Cantor Fitzgerald

–

“Despite this relatively weaker UK performance, the investment Carpetright is making to its offer will help maintain long-term performance.

“It has seen encouraging results from its smaller high street stores and will open more of this format, roll out quick wins from this trial across its estate and improve the lighting and layout in 28 stores during the second half.

“With ScS and Tapi gaining a greater share of the flooring market in 2016, these investments are essential to hold off the growing threat from these competitors.

“This improved offer will also enable Carpetright to capitalise on more buoyant market conditions, with growth in housing transactions supporting the market.” – Matt Walton, Verdict Retail

–

“There are two key pillars to earnings recovery at Carpetright – rebalancing the retail estate and driving improved sales densities”

John Stevenson, Peel Hunt

“There are two key pillars to earnings recovery at Carpetright – rebalancing the retail estate and driving improved sales densities.

“Store closures in the current financial year are already on track to create annualised cost savings of  more than £10m, the driving factor behind forecast upgrades in December.

“The sharp pick up in interest-free credit penetration as a result of greater staff focus and a revamped offer creates the potential for short term trading upside.” – John Stevenson, Peel Hunt