Kingfisher Reports Slight Sales Decline Amid Uncertain Market

In a recent report, Home improvement retailer Kingfisher plc revealed a 0.6% decline in total group sales for the third quarter. Despite a challenging market outlook, the company expects adjusted profit margins to be within a narrowed forecast, indicating cautious optimism about future performance.

Date: 25-11-2024

AI Rating: 5

Kingfisher plc reported a 0.6% decline in total group sales for the third quarter, amounting to 3.22 billion pounds. While sales in constant currency remained flat, the like-for-like sales showed a decrease of 1.1%. This slight decline suggests challenges in maintaining growth, particularly reflected in the weaker performance of key segments.

In terms of current trading, there are signs of improvement with LFL sales down just 0.5% for the initial three weeks of the fourth quarter compared to the exit rate from the previous quarter. This indicates that while conditions remain uncertain, there may be a modest recovery in sales momentum.

Looking ahead, Kingfisher tightened its fiscal year guidance, now projecting adjusted profit before tax to be around 510 million to 540 million pounds, slightly adjusted from the previous projection of 510 million to 550 million pounds. This adjustment signals cautious forecasting amid unpredictable market conditions.

Sales in the UK and Ireland showed a positive trajectory with a 1.2% increase to 1.62 billion pounds, though generated only a 0.4% increase on a like-for-like basis. In contrast, sales in France dropped significantly by 6.4% to 967 million pounds, exacerbating concerns over regional performance.

On a more optimistic note, the international sales saw an increase of 4.7% to 637 million pounds. This diverse performance across regions highlights Kingfisher's resilience but reflects a challenging operating environment.

CEO Thierry Garnier noted that improved performance in earlier months was offset by increased consumer uncertainty in October, driven by governmental financial policies. While big-ticket sales remain soft, early signs of recovery in core categories from repairs and renovations offer a glimmer of hope for future performance.

Stocks: KGF.L