Carpetright saw a significant deterioration in UK trading during the important post-Christmas trading period.
The group said this has had a significant impact on profitability and its outlook for the reminder of the year.
The group said revised full year profit guidance was in the range of £2.0m to £6.0m.
It said that UK trading was hit by lower customer footfall, with transaction numbers down significantly year-on-year. Like-for-like sales fell by 3.6% in the 11 weeks to 13 Jan, with a decrease of 1.4% within the flooring category, and a further material decrease in bed sales.
Core flooring like-for-like sales saw a decline of 7.1% since Christmas.
It said that in the Rest of Europe (Netherlands, Belgium and the Republic of Ireland) like-for-like sales increased by 4.3% in local currency terms.
Chief executive Wilf Walsh said: 'Despite a positive start to our third quarter, we have seen a significant deterioration in UK trading during the important post-Christmas trading period.
'While average transaction values were up year on year, the number of customer transactions since Christmas was sharply down, which we believe is indicative of reduced consumer confidence.
'Our response to the threat of new competition continues to be effective, with those stores that have traded against new local competition for more than 12 months performing ahead of the rest of our estate.
'Sales in our Rest of Europe business have also been volatile but we continue to deliver like-for-like sales growth, primarily reflecting the introduction of lower margin service income.
'The severity of the decline in footfall over this key trading period and our more cautious view of the outlook for the balance of the year leads to a significant reduction in our full year expectations.
'Against this background of a further deterioration in market conditions, we remain committed to driving through the improvements that are essential to the long term repositioning of the business.