Market Watch: Analysts fear Carpetright set to pile on the misery

Carpetright, which reports interim results on Tuesday, has had a difficult start to the year with cautious consumers avoiding spending on big-ticket items.

In its last trading update, the flooring firm warned like-for-like sales were down 7.3 per cent in the UK and Ireland in the 12 weeks to 23 October, compared with the 3.4 per cent fall seen at the end of July.

Analysts expect the decline in revenues to hit profits in its interim results, which are predicted to come in at about 12 million, down from 13.9m last year.

The City will be looking for any changes in strategy to pick sales up, particularly after chairman and chief executive Lord Harris of Peckham warned current market conditions are likely to continue into next year.

The firm continues to roll out beds company Sleepright - with the current total of bedding outlets at about 170 stores and a further 50 expected to open before the year end.

But analysts say the focus on Sleepright only highlights the weakness of its core product - carpets.

Carpetright - which has 702 stores across the UK, Ireland, the Netherlands and Belgium - said it still expected an improvement in its full-year margin due to cost controls and continued management of pricing and promotions.

But analysts at Numis Securities disagree and have lowered their full-year forecasts for the firm.

Numis's Andrew Wade said: "The most significant news is the continued roll-out of Sleepright, contributing to 4.6 per cent additional sales and highlighting the underlying weakness of carpets."

Premier Inn and Costa Coffee parent Whitbread is expected to continue its positive run this year when it gives its third-quarter trading update, also on Tuesday.

The firm has benefited from a strong performance at its budget hotel brand Premier Inn, which saw like-for-like sales soar 10.1 per cent in the first half of the year.

Whitbread is expected to reveal further plans for expanding the hotel chain, after an advertising campaign fronted by comedian Lenny Henry and a 29-a-room offer helped draw in customers.

The group - which also owns restaurants including Brewers Fayre - previously said it was prepared to increase the rate of new hotel openings and is expected to provide further details on Tuesday.

Whitbread posted a 28 per cent increase in pre-tax profits of 151m in the six months to 2 September, on total revenues of 805m.

Numis Securities expects the entertainment firm to bring in full-year profits of 282.3m, up from 239.1m.

Wyn Ellis, analyst at Numis, said: "Whitbread's interims were encouraging, coming in towards the top of expectations and we expect another strong update.

"In our view, the risk to estimates is on the upside, driven by continued strong growth at Premier Inn, consequently we expect the shares to perform well in the near term."

The pubs division and Costa are both expected to turn in similarly strong performances, though comparatives are tougher in the second half of the year.

SuperDry fashion firm SuperGroup is expected to continue its stellar performance on Wednesday when it announces half-year results.

Shares in the firm, which claims to be one of the fastest-growing fashion retailers, have nearly trebled in value since it went public in March on the back of strong updates.

Sales at SuperGroup rose by 65.4 per cent to 90.3m in the six months to 31 October.

In its most recent quarter, it opened a record 14 franchise stores overseas, including its first in the United Arab Emirates, bringing its total to 49. The group opened eight stores in the UK, taking its estate to 59 and opened a further 13 concessions in House of Fraser bringing the total up to 69.

Investors are hoping the group can carry on last year's strong performance when it increased pre-tax profits by 196 per cent to 22.5m in the year to 2 May.

The firm counts David Beckham, Kate Winslet and Leonardo DiCaprio among its celebrity fans. Premier Inn generates about one-third of its profits.