Carpetright has again warned that profits will be lower than expected, as sales continue to fall. The group warned that profits for the year to 28 April would be between £6m-£8m rather than the previous £8m-£12m forecast in December.

UK sales fell by 4.8% in the 12 weeks to 21 January. Like for like sales fell by 0.5%, but the chain says retail sales excluding insurance claims rose by 1%. Insurance sales were described as 'disappointing'. Lord Harris, executive chairman says sales are volatile and closely linked to the level of discounting, which is frustrating its attempts to increase margins. The relaunch of its Sleepright bed offer will also have a larger impact on margin that anticipated as it meets 'the continued need to drive value for the consumer to maintain sales momentum.' However the 27 branches that have been refurbished 'are delivering good growth'. The group says European performance had improved and was 'particularly pleased with the success of the recovery plan in the Republic of Ireland'. 'In this current environment, predicting the final outcome for the year with any accuracy is difficult. The result for the year will depend on our performance in the final quarter when we see some weak comparatives but, with sales volatility continuing to impact on the pace of margin improvement, we expect underlying pre-tax profits for the full year will be slightly below the lower end of the current range of market expectations. Looking forward, I see no respite from the challenging environment over the next 12 months but remain confident the group will emerge in a strong position to deliver future growth once consumer demand improves,' says Lord Harris.

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