Britain's biggest tile retailer Topps Tiles has seen it's share price dive more than 10% versus the FTSE 100 in the last 30 days since Woozle issued our short/sell recommendation to clients ahead of their reported results on 26th November.
The flooring specialist posted a 1.6% decline in pretax profit to £12.5m in the 12 months to 28th September. However the company cautioned that "consumer demand was weakened further" since the election was called, sparking a 7.2% decline in like-for-like sales during the first 8 weeks of their new financial year.
Management blamed the impending General Election for weighing on consumer sentiment adding that " a reduction in political uncertainty will be key to the short term outlook improving".
CEO Matthew Williams said:
"At the start of the new financial year, trading conditions have become more challenging, with consumer demand weakening further since the General Election was called in late October. Against this backdrop of heightened political and economic uncertainty, like-for-like sales in the first eight weeks have declined.
Whilst we expect external events will continue to weigh on consumer confidence for the immediate future, we remain confident that our market-leading retail offer and growing commercial operations give us a strong platform from which to deliver sustainable growth over the medium and long term."
Woozle's short/sell idea on Topps Tiles issued on 4th November highlighted evidence of slowing like-for-like sales trends across their UK store estate from increased DIY competition, margin pressures, rising in-store cost contributions, unsuccessful promotions and markdowns, headwinds to consumer demand from the UK general election, and macroeconomic headwinds slowing UK housing market activity.
Clients have been able to take advantage of more than 10% returns on our short/sell idea on Topps Tiles since we released our recommendation.
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