Topps Tiles shares fell by 8 per cent on Wednesday after the business posted a downbeat trading update. 

The retailer said the recent heatwave led to 'temporary work stoppages' among housebuilders and traders, hitting the chain's footfall and sales. 

In an update, it said: 'Recent periods of extreme heatwave conditions led to temporary work stoppages among housebuilders and traders, further affecting activity levels.

'Whilst there is likely to be a catch-up over a six-month period, this is unlikely to come back fully in our financial year which ends in September.' 

In an update for its third quarter to 27 June, the group flagged ongoing sluggish demand and cut its annual profit guidance. 

The tile retailer said it now expects underlying profits for the year to the end of September to be above £6.5million, a sharp fall from the previous year's £9.2million forecast. 

Topps Tiles said shoppers were also shifting to lower priced products, putting pressure on its margins. 

The group reported flat like‑for‑like sales for the period, which worsened through the quarter. Total sales fell 1.8 per cent to £75.6million. 

The business has been cutting costs in the face of more difficult trading and in April announced 23 shops were being shut, representing 7 per cent of its 319-strong estate.

Store closures in its Topps and CTD brands have further put revenues under pressure. 

Topps Tiles saw its deal to buy CTD out of administration probed by the Competition and Markets Authority, which required it to sell off a number of CTD stores to appease concerns. The firm now has 23 CTD stores, down from an initial 31.

In December, Topps Tiles acquired the brand of collapsed rival Fired Earth in a £3million rescue deal. 

The Oxfordshire-based competitor collapsed into administration in October, resulting in the closure of its 20 showrooms and 133 job cuts. 

Alex Jensen, chief executive of Topps Tiles said on Wednesday: 'Topps continues to outperform the wider market despite weaker consumer sentiment and an increased focus on lower priced products.

'We're making significant strategic progress across our priorities and the self-help actions we are taking to support profitability are working and will position the business for long-term sustainable growth.

'In the short term, the macro-economic environment continues to remain challenging.'

The retailer said it was on track to deliver its 'self-help initiatives' to drive profitability, which include head office role consolidation and a 'flexible labour model'. 

Adam Vettese, a market analyst at Etoro, said: 'Topps Tiles shares plunged at the open after a disappointing Q3 trading update that highlighted weakening demand and forced a cut to full-year profit guidance.'

He added: 'With the shares already depressed, today’s sell off reflects investors reassessing near term prospects in a tough sector. 

'Self-help measures on costs and the store network remain on track, but the update suggests any recovery in profitability will take longer than hoped. Further volatility is likely until trading stabilises.'