Retailer Carpetright reported "small but steady" progress in the UK today but warned sales continue to be driven by promotional activity.

The floor coverings business, which has 467 stores in the UK, posted a lift in like-for-like sales of 6.1% in the 13 weeks to last Saturday as it benefited from growth in May and June and easier comparisons with last year.

But the improvement came at the expense of margins, which fell in the period due to its "market beating promotions". It said UK margins will now be lower across the financial year, having previously said they would be flat.

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Carpetright, which recently posted losses of £7.2 million for the year to April 26, still hopes that profits at an underlying level will reach £9 million this year.

The company has so far modernised 283 of its UK shops in an effort to give them more natural light, updated signage and better layouts.

Carpetright said: "The UK business saw small but steady improvements in sales growth during May and June, with this trend accelerating significantly during July, assisted by weak comparatives in 2013 when sales were impacted by a prolonged period of hot weather."

At its European division, made up of Ireland, Netherlands and Belgium, like-for-like sales fell 3.6%, although the firm said the latter two countries returned to profit in the quarter, aided by a rise in margins due to better sourcing and more streamlined operations.

Carpetright also said that its new chief executive Wilf Walsh took up his post on July 21, allowing veteran retailer and founder Lord Harris of Peckham to step aside from the day-to-day running of the company.

Mr Walsh had been chairman of European betting business Fortuna Entertainment, having previously been managing director of bookmaker Coral.