Carpetright has delivered a strong turnaround in UK sales, but a dire performance in Europe and write-downs in the value of its property saw it post a full-year loss.
The retailer also struck a cautious note on the nascent recovery in the housing market, adding "it remains premature to call a wider recovery in the economy".
Carpetright posted a 2.2 per cent uplift in like-for-like revenue over the year to April 27, boosted by store refurbishments, improved carpet ranges and strong sales of beds. Chief executive Darren Shapland said its "self-help measures" had contributed 3 per cent to its sales turnaround.
"We think the market is flat at best," he said. "The big elements of growth are coming from modernising the estate."
But its underlying sales tanked by 11 per cent in Europe, dragged down by tumbling revenue at its embattled business in the Netherlands.
This contributed to Carpetright sinking to a £5.1m loss, though the main damage done to its bottom line came from property charges, including onerous lease provisions.