Topps Tiles warns of falling profit margins amid rising costs

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“I am confident that our successful strategy and strong balance sheet positions us well to deliver long-term sustainable growth” – Rob Parker.
// Topps Tiles grew like-for-like retail sales 1% year-over-year in the 13 weeks to January 1
// The retailer’s CEO said global supply chain challenges and increased staff absence due to Covid-19 continue to provide significant headwinds,

Topps Tiles had said it expected annual gross margins to be “moderately lower” than last year as the British tile retailer battled higher shipping and input costs.

“Global supply chain challenges, increased staff absences due to Covid-19 and material price inflation continue to create significant headwinds,” chief executive Rob Parker said in a statement. communicated.

The retailer increased like-for-like retail sales 1% year-on-year in the 13 weeks to Jan. 1 and 21% from the same period two years ago.


READ MORE: Topps Tiles achieves record year of sales with new productproducts


The company also said it benefited from good levels of trading continued into December as customers sought to complete their home transformation projects by Christmas.

Parker said: “We made an encouraging start to the new fiscal year, with strong customer demand in the first quarter and two-year and one-year like-for-like sales growth against tough comparisons.”

During the period, the retailer struggled to mitigate or fully overcome cost pressures caused by rising shipping costs and general cost-of-goods inflation as it sought to protect earnings. raw.

However, he warned that selling prices will rise by a lower percentage than cost prices, so he expects gross margins as a percentage to be moderately lower year-over-year.

Meanwhile, Topps’ business operations saw sales jump about 21% in the three-month period.

Looking ahead, Parker said, “I am confident that our successful strategy and strong balance sheet positions us well to deliver long-term sustainable growth and achieve our 20% market share target of ‘1 in 5 by 2025”.

The company said it was holding higher inventory levels than in the past, to alleviate supply chain challenges.

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