Topps Tiles Shares: Edison More Cautious, Notes ‘More Challenging Outlook’

Edison has cut its profit forecasts for Topps Tiles (LON: TPT) after the UK floor tile retailer reported softening trading in the second quarter of its fiscal year, with the research firm warning that Middle East conflict and rising cost pressures are likely to weigh further on the business.

Topps Tiles reported its half-year results on April 1.

Edison analyst Russell Pointon has now reduced his fiscal 2026 pre-tax profit forecast by 21% and trimmed his fiscal 2027 estimate, citing a deteriorating consumer backdrop and weaker-than-expected like-for-like sales at Topps Tiles stores.

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“With the more challenging environment apparent, we take a more cautious stance on the outlook for revenue growth in FY26,” Pointon wrote.

Group revenue growth excluding CTD Tiles slowed to 0.6% in the second quarter from 3.7% in the first quarter, with Topps Tiles stores swinging to a like-for-like decline of approximately 2% after 2% growth in the prior period.

Edison noted that trends outside the core store estate were more encouraging, with Pro Tiler and group online revenue growing 21%, and Fired Earth delivering a profit in the first half.

In response to the tougher environment, management announced the closure of 23 underperforming stores, representing around 8% of the fiscal 2025 base, over the next 12 months, a move expected to improve overall profitability by removing loss-making or low-contribution locations.

Edison’s new fiscal 2026 pre-tax profit estimate sits modestly below the fiscal 2025 reported figure, making it slightly more cautious than management’s own guidance for profit growth.

Topps Tiles shares have fallen 18.5% year-to-date, broadly in line with the scale of Edison’s forecast downgrade.