Analysts warned that Topps Tiles’ profit warning last week could signal weak trading for the wider home-related retail sector.
Topps Tiles reported like-for-likes in the first seven weeks of the fourth quarter had slumped 10.4%, compared with a 1.9% decline in the third quarter. According to the retailer, its full-year earnings are “likely to be below the current range of analysts’ estimates”.
Espirito Santo analyst Sanjay Vidyarthi said: “The read-across for other housing-related/ DIY stocks is not positive. We expect strong players to continue to take market share as weaker players exit.”
Seymour Pierce analyst Kate Calvert said: “We retain our sell recommendation as we expect the housing market to remain subdued for the rest of the year and next.
“There is limited scope for material cost savings and competition is intensifying.”
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