Home improvement retail group Kingfisher has reported a 0.9% drop in first-quarter underlying sales as growth in its domestic market was offset by poor performance in France.
In the UK & division, B&Q saw its sales edge up 0.4% on a like-for-like basis during the period to 30 April, supported by a strong performance in e-commerce and the trade segment. The business saw improved volume trends in its core categories, particularly tools & hardware and building & joinery. However, this was partially offset by weak sales performance in ‘big-ticket’ categories as consumers remained reluctant to fork out on expensive products amid cost of living pressures. Seasonal category sales were said to be positive, although impacted by the wet weather in April.
Meanwhile, Screwfix saw like-for-like sales increase 2.4%, with robust demand from trade customers and strong market share gains. It opened seven new stores in the UK & Ireland, and remains on track to open up to 40 stores in these countries in this financial year.
In France, like-for-like sales at Castorama and Brico Dépôt declined by 5.3%, impacted by ongoing weakness in the broader market.
In its International division, which includes operations in Poland, Iberia and Romania, sales were up 0.4% amid an improved consumer environment and progress with initiatives to boost trade sales.
Kingfisher revealed that the second quarter had started in line with the underlying sales trends of the first, with group like-for-like sales down 2.5% in the three weeks to 18 May. The group noted that it expects to deliver around £120m of additional cost reductions and productivity gains this year, which will partially offset higher pay rates and technology investments.
As a result, the group is maintaining its current guidance for full-year adjusted pre-tax profit of around £490m to £550m.
CEO Thierry Garnier said: “We continue to drive our strategic priorities at pace and remain focused on delivering market share growth. Our e-commerce sales grew by 12.7% and we successfully expanded our marketplace model to France. We delivered further expansion of Screwfix in France, and advanced our data, AI and retail media initiatives. Leveraging our learnings from TradePoint in attracting trade customers in the UK, we are excited to have widened trade loyalty programmes across all our banners.
“We remain focused on driving productivity gains and maintaining tight control of our costs and inventories. In France, we are pushing ahead with our plan to improve performance, having successfully completed our structural simplification and transitioned to new leadership at Castorama.
“Looking forward, we confirm the guidance outlined in March for the full year, including our expectations for the overall market in 2024.”
NAM Implications:
- No surprises here hopefully…
- …given cash-strapped and well-off consumers flight from ‘non-essential’ purchases.
- (Except perhaps via Amazon?)
