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CMO Group PLC (LSE:CMO), an online-only building materials company based in Plymouth, reported that an uptick in consumer confidence over the past few months has mitigated some of the effects of declining sales. After a challenging start to the year due to adverse weather conditions, sales began to improve in the three months ending July 31, 2024. Consequently, the company’s like-for-like sales decreased by 17% compared to the same period last year, which is an improvement over the 21% decline observed for the three months ending March 31, 2024.
Division Performance
Among its various divisions, CMO's plumbing sector showed the most resilience. Sales in this division fell by 12% over the half-year period but saw a 9% increase in July. In contrast, the tiling division faced significant challenges, with sales dropping by 36% during the six months and 27% in July.
Market Conditions and Outlook
Despite these difficulties, CMO expressed optimism about future sales growth, attributing this optimism to positive developments in the market and a recent reduction in interest rates. The company noted that the average order value is improving as consumer confidence is shifting towards larger repair, maintenance, and improvement projects, reflecting broader market trends.
Executive Remarks
Dean Murray, Chief Executive, highlighted the early signs of market recovery and the potential impact of the recent interest rate cut on stimulating the market. He also emphasized the significance of the landscaping superstore's full launch and the anticipated benefits of the 'Super Rewards' program, which is designed to enhance customer loyalty through rewards based on spending and behaviors.
Murray concluded by noting that the positive sales trend observed in the second quarter and into July, combined with a focus on profitable sales and operational efficiency, supports a confident outlook for the company’s future.
