Travis Perkins, a leading U.K. building-materials retailer, announced on Wednesday that it is revising its 2023 adjusted operating profit expectations due to ongoing challenging market conditions and deflation in commodity products, which is impacting margins. The company now anticipates its adjusted operating profit to be in the range of £175 million to £195 million ($215 million – $239.6 million), compared to the previous guidance of around £240 million in August.
Decline in Revenue and Sales
Travis Perkins reported a 1.8% decline in revenue during the third quarter. Likewise, like-for-like sales also dropped by 1.8%, reflecting a slowdown in new-build housing activities and domestic repairs, maintenance, and investments during this time.
September Market Activity Worsens
The situation further worsened in September, with Travis Perkins experiencing a 3.4% year-on-year decline in revenue and a 3.1% decrease in pricing. This decline was primarily attributed to deflationary pressure on commodity products, affecting overall market activity and sentiment.
Focus on Minimizing Impact
Acknowledging the challenges posed by elevated overhead inflation, Travis Perkins remains committed to taking necessary actions to minimize its impact on profitability. The company continues to closely manage working capital and capital expenditure in order to align with the current market conditions.
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