Topps Tiles PLC says inflation to blame as it warns over margins
The company says it has taken steps to mitigate the impact caused by current environment
Topps Tiles PLC (LSE:TPT) flagged the impacts of inflation, with gross margins for 2021 expected to be ‘moderately’ lower than the prior year.
Specifically, the trade and DIY retailer said it was dented by higher shipping costs. Higher retail sale prices aren’t expected to keep pace with the increased costs, Topps noted.
The company, in a statement, told investors it had taken steps to mitigate the impact caused by market conditions, including holding higher levels of inventory to become more flexible in supplying its products.
“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,” said chief executive Robert Parker.
In Wednesday’s statement, Topps reported a 1% increase in retail sales for the first quarter ending 1 January compared to the same period from the previous year.
It said that the commercial business is performing considerably better than the same period last year, with sales 21% in the first quarter report.
Parker added: “We have 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 shares were down 1.56% in Wednesday morning’s deals, changing hands at 60p.
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