B&Q Owner Kingfisher Sees Share Gains But Q1 Sales Slightly Lower

Kingfisher plc (LON: KGF) reported its first quarter trading statement on Tuesday. The statement indicated that trading was in line with expectations, and the company maintained its full-year guidance. 

The FTSE 100 company reported total sales for the quarter of £3.3 billion, a slight increase of 0.3% in constant currency but a minor decline of 0.3% in reported terms compared to the same period last year.

Despite the overall slight decline, Kingfisher experienced notable share gains at B&Q in the UK, supported by robust e-commerce performance and strong sales at TradePoint. 

Screwfix also saw positive like-for-like (LFL) sales growth. However, LFL sales across the group fell by 0.9%, reflecting broader market trends, particularly in the “big-ticket” category, which saw a significant 6.3% decline.

France's performance was stable, with Castorama and Brico Dépôt aligning with market expectations amidst a weak retail environment. Poland showed promising sales trends as the consumer market improved.

E-commerce emerged as a strong growth area, with online sales up 12.7%, now accounting for 18.8% of total group sales. Additionally, B&Q's e-commerce marketplace saw a remarkable 99.4% year-on-year growth in gross merchandise value.

CEO Thierry Garnier expressed confidence in the company's strategic direction, highlighting continued efforts to enhance market share, control costs, and drive productivity gains. 

Despite a cautious outlook for the overall market in 2024, Kingfisher said it remains focused on leveraging its strategic priorities to achieve its financial targets. it is confident in the delivery of around £120 million of additional cost reductions and productivity gains this year to partially offset higher pay rates and technology investments.

The company projects adjusted pre-tax profit between £490 million and £550 million FY 24/25.

Last month, HSBC upgraded Kingfisher to Buy from Hold with a new price target of 305p, up from 235p. The bank said in a note that it expects consumer sentiment toward housing projects and an improving outlook for housing market activity in the UK and France to aid the 20% of sales that Kingfisher derives from move-home renovations.