Kingfisher profits hit by weather and weak demand
Kingfisher, the owner of B&Q and Screwfix, saw its profits drop by 28% to Â£114 million in its first quarter as poor weather and on-going weak consumer confidence in its key markets impacted sales.
In the 13 weeks to 4 May, total group sales fell 0.4% to £2.6 billion while on a like-for-like basis sales declined by 4.2%.
Kingfisher chief executive Ian Cheshire said: "Market conditions have remained challenging in the first quarter compounded by the effects of an early Easter and unseasonably cold weather across Europe. As a result, general footfall was down and demand for outdoor maintenance, gardening and leisure products was adversely affected for a second year running."
However, the group said its performance towards the end of the quarter was "encouraging" following the return of more seasonal weather.
Total sales in the UK and Ireland declined by 3.4% to £1.07 billion and dropped 4.7% on a like-for-like basis. Retail profit fell to £50 million from £74 million a year ago.
At the B&Q DIY chain, total sales declined by 5.7% to £913 million and by 5.6% on a like-for-like basis as the cold weather in the period affected footfall. Sales of outdoor seasonal products, which can represent up to 30% of B&Q’s total first quarter sales, were down over 10%. Sales of building products were also impacted by the cold weather while bathroom sales suffered in what Kingfisher said was a "weak, price-aggressive market".
Screwfix grew its total sales by 12.6% to £155 million in an improving smaller tradesman market. Like-for-like sales increased by 1.7% as the retailer benefited from new ranges, the roll out of new outlets and the introduction of a mobile 'click, pay & collect' offer.
In France, Kingfisher's total sales declined by 0.9% to £1.08 billion with like-for-like sales falling by 5.6%. Retail profit declined by 14.4% to £66 million.
Looking ahead, Cheshire said: "We still have our key summer season to come and we are ready to capitalise on any improvement in conditions during this peak trading period. We will continue to focus hard on our margin and cost initiatives helping us to reinforce our value credentials with customers during these challenging times.
"Our self-help plan, 'Creating the Leader', is progressing well, improving our customer offer whilst optimising the generation and use of cash to deliver shareholder value."
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