Topps Tiles makes 'encouraging start' to new year

Retailer Topps Tiles said on Wednesday that it had made "an encouraging start" to the new financial year, with strong customer demand during the first quarter and like-for-like sales growth on both a two-year and one-year basis against tough comparatives.

Topps Tiles stated trading had remained "good" in its omnichannel retail business, with like-for-like sales on a two-year basis up 21.0% in the first 13 weeks of the year. On a one-year basis, retail like-for-like sales were 1.0% higher against "a very strong comparative" in 2021.

The London-listed firm also noted that during the quarter, it had taken "significant steps" to fully mitigate or pass-through cost pressures caused by higher shipping costs and general inflation in the cost of goods, thereby protecting gross profit. However, Topps noted that as selling prices will increase by a lower percentage than cost prices, it does expect percentage gross margins to be "moderately lower" year-on-year as a result.

Operating costs in the business remained "well controlled and in line with forecasts", despite the ongoing pressures in areas such as utilities, employment costs, fuel costs and taxation, while its commercial business was also said to have started the new year with "good momentum", with sales in the first three months roughly 21% higher than at the same time a year earlier.

Chief executive Rob Parker said: "Global supply chain challenges, higher staff absence due to Covid-19 and material cost price inflation continue to provide significant headwinds, however, we are managing these challenges effectively.

"I am confident that our successful strategy and strong balance sheet leave us well-positioned to deliver sustainable long term growth and our 20% market share goal of '1 in 5 by 2025'."

As of 1100 GMT, Topps shares were up 1.25% at 64.80p.