Carpetright, Dignity and Bonmarche

“The FTSE 100 edged higher after investors in Asia appeared to be protecting positions this morning, given last night's decline on Wall Street,” says AJ Bell Investment Director Russ Mould.

“Carpetright’s shares plummeted in early trading after it slashed its profit guidance following a slump in sales. The post-Christmas period is traditionally a time when consumers decide to freshen up the home but the belt-tightening which has hit huge swathes of the high street has also taken its toll on Carpetright. Lower footfall resulted in a significant drop in sales with core flooring like-for-like sales down 7.1% since Christmas. Carpetright’s revised full year profit guidance in the range of £2.0m to £6.0m is a long way short of previous market forecasts of around £14m. The group’s shares were down by more than 39.2%.

“Funeral-related services provider Dignity lost more than half its value after warning that profits this year would be substantially below forecasts. The group is slashing prices of a simple funeral by an average of 25% and freezing prices for its traditional funerals to protect its market share. Dignity’s pre-arranged and crematoria businesses are performing strongly and in line with forecasts but the group is having to take action to counter accelerating price competition facing its funeral business. Dignity’s shares were down by over 52.8%.

“Budget clothing retailer Bonmarche was a double-digit faller after a disappointing like-for-like sales in its stores over the Christmas period. Overall sales were down by 5.5% in the 13 weeks to 30 December. Store like-for-like sales fell by 9.7% while online sales rose by 28.5%. The clothing market became more challenging during the period and no material change in underlying conditions are likely in the short term. Bonmarche’s shares were down by more than 16.7% in early trading.”

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