Floor coverings retailer Carpetright blamed searing temperatures during June and July for a decline in like-for-like sales in the UK and Ireland.

The fall of 0.3 per cent in the first 13 weeks of the financial year offsets the encouraging trends seen at the end of the company's last financial period.

Lord Harris of Peckham, who is Carpetright chairman and chief executive, said: "Sales were strong in May but June and July were adversely affected by the unseasonably hot weather across the UK and Europe. August has started encouragingly."

Finance director Ian Kenyon added: "The World Cup always seems to correspond with hot weather - it's just one of those things.

"Customers change their behaviour. Suddenly, they can get outside and put the barbecue on, but after a period of time, things do get back to normal."

The opening of 39 stores and closure of three other sites meant total sales increased by 4.3 per cent in the 13 week period.

The rest of Europe recorded a total sales increase of 9.1 per cent with like-for-like sales up by 3.9 per cent.

Carpetright said it had improved margins, adding that there had also been a softening in rent inflation.

The store expansion programme left Carpetright with 476 outlets and 57 concessions in the UK and Ireland by the end of the first quarter, including 27 in the Midlands.

The group has a total of 575 sites, including in the Netherlands and Poland, where Carpetright recently opened its first two stores.

Lord Harris added: "We continue to expand our store base and have improved gross margins, Additionally we are starting to see a softening in rental cost inflation for the first time in many years."

In the last financial year, like-for-like sales fell 7.1 per cent in the first half of the period but improved by 1.9 per cent in the second half.

The stronger second half mirrored a recovery in UK house sales with new carpets often high on the list of priorities for new homeowners.

Pretax profits for the year to April 29 fell 11 per cent to £64.2 million.

Margins are also improving, the company said.

"We guided the market at the time of our preliminary results in June that margins would be up by between 50 and 75 basis percentage points for the full year and I'm confirming that we're on track to deliver that and a bit more," Mr Kenyon said.

He said he was "comfortable" with analysts' year to April 28 2007 profit before tax and exceptional items fore-casts of about £62-63 million, up from £56.7 million last time.

"The anticipated improvement to the gross margin is ahead of our expectation, with the prospect for a better result in the first-half and the year," analyst Robert Brent at KBC Peel Hunt said in a note.

Investec Securities analyst Matthew McEachran said that while upgrades were unlikely for now, Carpetright's comments on easing cost inflation meant "scope still exists, especially if sales bounce now the heatwave has fizzled out".

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