Topps Tiles Outperforms Soft Market, Closes 23 Stores to Boost Profitability

Topps Tiles half-year: market outperformance, profit-first store closures, and digital gains

Topps Tiles has posted a steady half-year trading update for the 26 weeks to 28 March 2026. In a softer Home Improvements and DIY backdrop, the Group has eked out growth in its core operations, held like-for-like sales broadly flat, and leaned into a clear profit-first plan that includes closing 23 underperforming stores. The message is simple: protect margins now, set the base for growth later.

Management says the Group continues to outperform the wider market, which declined by approximately -2.5% over the period. The company also expects a second-half benefit from cost savings and operational changes already in motion.

Headline numbers investors should know

Total Group revenue (incl. CTD)	£142.7m, down 0.1% year-on-year
Group revenue (excl. CTD)	Up 2.1% year-on-year
Second quarter revenue growth	+0.6% (growth moderated from Q1 but stayed positive)
Like-for-like (LFL) revenue growth	+0.1% in the first half
Online revenue mix (incl. CTD)	21.0% of Group revenue, +2.0ppts vs FY2025 and +3.3ppts vs H1 last year
CTD LFL revenue	+1.0% in the first half
Pro Tiler revenue growth	Over 21% year-on-year
Fired Earth	Positive profit in the first half, further growth expected in H2
Store estate (Topps Tiles)	289 stores as at 28 March 2026 (297 at start of FY 2026)
Store estate (CTD)	22 stores
Planned Topps Tiles store closures	23 across the financial year

Definitions: LFL means like-for-like, comparing sales from stores and online channels that have traded for more than 52 weeks. ppts means percentage points.

What’s driving performance: strong core, CTD recovery in progress

Total Group revenue was essentially flat at £142.7 million, nudged lower by volume loss tied to the lengthy Competition and Markets Authority (CMA) process at CTD. Strip CTD out and revenue was up 2.1% year-on-year, showing the core Topps Tiles business is holding up well in a tougher market.

Like-for-like sales grew by 0.1%, which sounds modest but is a clear outperformance versus an estimated -2.5% market decline over the period. Growth did ease in the second quarter to +0.6%, suggesting consumer demand remains fragile, but the business stayed in positive territory.

CTD – acquired in 2024 and reshaped after required store disposals – is described as on track to return to profit this financial year. Housebuilder volume has been rebuilding since late 2025, and CTD stores delivered +1.0% LFL growth in the first half. That is directionally encouraging given the earlier disruption.

Self-help plan: 23 store closures to lift margins

Topps is pushing through a set of self-help measures aimed at medium-term profit growth. The big call is the closure of 23 underperforming Topps Tiles stores. The Group expects this will reduce overall revenue but improve profitability through sales transference and lower costs.

Sales transference means nearby stores and online channels pick up a portion of sales from closed locations, softening the top-line hit while the cost base falls. Savings are expected to be weighted to the second half, underpinning this year’s profit and supporting sustainable improvements beyond.

My take: in a soft market, pruning the estate and sharpening the cost base is sensible. The trade-off is near-term revenue dilution, but the intent is margin gain. Execution will be key – efficient transference, tight cost control, and minimal disruption to customer service.

Digital, data and Trade: 21% online and rising

Digital continues to move up the mix. Online revenue reached 21.0% of Group sales, up 2.0 percentage points versus FY2025 and 3.3 points against the first half last year. That is a meaningful shift for a category still heavily influenced by in-store experience.

The Group has launched a new customer engagement platform, live stock visibility in Topps Tiles, and a new transactional website for CTD. A Trade App is on track for April 2026, and system modernisation – new tills and an ERP upgrade – began in March 2026. ERP (enterprise resource planning) upgrades are unglamorous but important plumbing that should improve stock, pricing and process efficiency over time.

Online brands continue to shine: Pro Tiler delivered revenue growth of over 21% year-on-year, and Fired Earth already posted a positive profit in the first half, with more to come in the second half, according to the statement. That diversified digital growth is a bright spot for margin and cash conversion potential.

CTD in focus: from disruption to contribution

CTD has been through a lot: a lengthy CMA process, store disposals, and a reset. The Group remains on track to return the CTD business to profit in the financial year. With LFL up 1.0% and housebuilder volumes rebuilding since late 2025, the direction is positive.

For context, CTD currently trades from 22 stores, down from 31 in the prior year due to property decisions and the requirement to dispose of four stores following the CMA investigation. The stabilisation here matters because CTD’s earlier drag is cited as a key reason overall revenue was slightly down year-on-year.

Why this update matters for investors

• Market share resilience: LFL up 0.1% versus an estimated -2.5% market shows continued share gains.
• Profit-first actions: 23 store closures and head office efficiencies are targeted at sustainable profit growth, weighted to H2.
• Digital edge: 21.0% online mix and stronger owned brands (notably Pro Tiler) provide leverage and optionality.
• CTD turning: On track to return to profit this year, with volumes improving and LFL at +1.0%.
• Execution risks: Consumer sentiment remains subdued, second quarter growth slowed, and store closures must be managed carefully.

What is not disclosed here: profit, margins, cash flow, net debt, closure costs, and detailed guidance are not disclosed in this trading update. We should get more colour with interim results on 19 May 2026.

Positives and watch-outs

What I like

• Clear outperformance vs a weak market, with the core business still growing excluding CTD.
• Decisive cost actions that should bolster in-year profit and set a stronger base for 2027 and beyond.
• Digital and data execution delivering tangible gains – higher online mix, better tools, and brand momentum.

What could bite

• Revenue drag from store closures is acknowledged by management – the margin math needs to land cleanly.
• Macro headwinds persist, including cost inflation and fragile consumer sentiment, which the CEO flags.
• Closure and transformation programmes often carry one-off costs – not disclosed here – so timing effects matter.

Bottom line: steady in tough conditions, with profit upside in H2

This is a steady, sensible update. Topps Tiles is holding the line on sales in a falling market, backing profitable growth with self-help measures, and pushing hard on digital. The second half should show the benefit of cost savings and estate optimisation if execution stays tight.

Key dates and metrics to watch next: delivery of H2-weighted savings, CTD’s path to profitability, online mix progression, and the interim results on 19 May 2026 for the financial detail. For now, the strategy and direction look aligned with the conditions on the ground – cautious on revenue, confident on profit.