Shares in Carpetright were down on the FTSE 250 in morning trading after the retailer reported a fall in revenue and profits in the half year ended 30 October.
The group said that its revenue had fallen from £258 million in the same period last year to £248 million, while pre-tax profit declined from £11 million to £9.8 million.
However the group was able to reduce its net debt from £71.3 million to £58.5 million.
Despite the fall in profits Carpetright said it would be holding its interim dividend at 8.0 pence per share.
During the six month period Carpetright closed two of its 586 stores in Britain and one of its 119 stores in Europe.
Lord Harris of Peckham, Chairman and Chief Executive of Carpetright, said, "The economic and consumer environment remained challenging in the first half. Against this backdrop, the Group continued to trade profitably and generate net cash.
"Whilst we remain cautious about the retail market in the balance of the financial year and throughout 2011, the Board has confidence that the Group is well positioned to deliver future sales growth when consumer demand in our sector improves."
By 10:45 shares in Carpetright were down 4.33 per cent on the FTSE 250 to 761.50 pence per share.