DIY giant Kingfisher reported a like-for-like drop of 3% in constant currency in the 13 weeks to January 30 but the retailer still expects to beat profit forecasts. Group revenue decreased 1.6% to £2.3bn.
At B&Q UK like-for-likes dropped 3.5% while revenue slid 1.6% to £836m, reflecting “exceptional adverse weather in January”. Kingfisher said prior to the snow, like-for-likes were “slightly up”. Gross margins are expected to be “strongly up”, reflecting reduced promotions compared with last year.
Kingfisher group chief executive Ian Cheshire said despite the January snow the retailer’s “ongoing programme of self-help initiatives on gross margin and costs resulted in strong quarterly profit growth”. He added: “We expect our full-year earnings will be slightly ahead of current analyst consensus expectations.”
Kingfisher’s French chains Castorama and Brico Depot suffered a 4.6% decline in like-for-likes. Total sales dropped 2.1% to £918m. Kingfisher’s other international operations’ like-for-likes rose 3.6% and revenue edged up 1% to £441m, driven by strong performances in Russia and Spain. In China like-for-likes surged 29.2%, while Polish like-for-likes were down 4.7%.
Shore Capital analyst Kate Calvert said sales were “disappointing” but upped her pre-tax profits expectations 5% to £634m.
Oriel analyst Ramona Tipnis said it was a “credit to the strategy in place” that, despite the impact of snow, Kingfisher expects better-than-expected full-year profits.