Kingfisher Shares Plunge as Near-Term Outlook Remains Uncertain

Shares of home improvement retailer Kingfisher plc (LON: KGF) tumbled 13.5% Monday after the company tightened its full-year profit guidance and warned of ongoing uncertainty in its key markets.

In its third-quarter trading update, Kingfisher reported flat total sales at £3.2bn on a constant currency basis, with like-for-like (LFL) sales dipping 1.1%.

While performance in August and September was said to have been resilient, October sales were impacted by weak consumer sentiment in the UK and France, attributed to government budget-related uncertainties.

The company said Screwfix and TradePoint were standout performers in the UK, with LFL sales up 1.8% and 4.9%, respectively, contributing to a 1.3% sales increase in the UK & Ireland overall.

However, sales at French banners Castorama and Brico Dépôt fell 4.9% and 3.3%, respectively, with adverse weather further dampening results.

Kingfisher's “big-ticket” items, representing 16% of sales, continued to struggle with a 4% LFL decline, although CEO Thierry Garnier noted “early signs of improvement.”

The company expects adjusted pre-tax profit for the year to fall between £510 million and £540 million (from £510 million to £550 million), narrowing the top end of its previous guidance.

The company said it expects the “near-term market outlook to remain uncertain,” although it remains confident in its business model and ability to drive market share.

Garnier acknowledged heightened uncertainty stemming from macroeconomic and political developments but maintained confidence in the group's strategy. “We continue to focus our energy on what we can control – delivering further market share gains through our key strategic priorities, and managing our retail prices, costs and cash effectively,” he said.