Kingfisher’s second quarter impressed analysts, despite a slump in UK sales as bust rival Focus launched a closing down Sale.
The DIY market leader posted group like-for-likes down 0.5% in the 11 weeks to July 16, and B&Q suffered a 6.7% fall as it was hit by the Focus effect, as well as the impact of sales being brought forward into the first quarter because of warm weather. France was Kingfisher’s star performer, as like-for-likes there rose 3.7%.
Numis analyst Andy Wade said: “Kingfisher has posted another solid quarter of trading, albeit the UK run-rate was weaker than anticipated. However, France performed ahead of expectations. We remain positive about the Kingfisher story.”
Panmure analyst Philip Dorgan said: “This quarter’s performance is stronger than it looks in the UK and France continues to motor.”
At B&Q, gross margins are expected to be up “despite tough comparatives” as a result of sales of higher margin products and direct sourcing.
Like-for-likes rose 1.4% in Kingfisher’s other international markets, which include Poland, China and Russia.
Kingfisher chief executive Ian Cheshire said: “As anticipated, conditions in our second quarter were tougher than the first, which benefitted from favourable weather.
“The UK remains challenging, compounded by disruption by a major competitor closing down. However, we remain on track year to date and expect to emerge from this year in excellent shape.”