Kingfisher issues profit warning as French market struggles

In a trading update for the third quarter, Kingfisher said its full-year adjusted profit before tax guidance had been lowered from £590m to £560m to reflect “market weakness in France and continued resilience in the UK”.

While Kingfisher said that Castorama was performing in line with the market, Brico Dépôt was underperforming due to “significantly higher weighting of building materials and electricals, plumbing, heating and cooling products”.

Kingfisher group sales were £3.2bn in the third quarter, down 2.1% on reported and 2.7% on constant currency metrics. Like-for-like group sales were down 3.9%.

UK sales were up 3.3% in the third quarter, while like-for-like sales were up 1.1%. Total sales in France were down 8.5% for the period with like-for-like sales down 8.6%.

Total sales in Poland fell 7.5%, down 9% on like for like, but Kingfisher reported seeing an improvement in sales trends since the first half.

Kingfisher posted total ecommerce sales growth of 7.4%, supported by strong growth of B&Q’s marketplace, which hit 35% of its total ecommerce sales in October.

Kingfisher chief executive Thierry Garnier said: “Our UK banners performed well in Q3, with B&Q, TradePoint and Screwfix growing sales and market share.

“In France, our performance was impacted by a weak retail market, as well as a delayed start to insulation, plumbing and heating sales – to which Brico Dépôt is more heavily weighted – due to unusually warm autumn weather and strong prior year comparatives in these categories.

“In Poland, we are seeing early signs of recovery in the trading trend, against an incrementally more positive consumer and economic backdrop. Reflecting the weakness of the French market, and notwithstanding our proactive cost actions, we have lowered our group profit guidance for the full year.

“We continue to focus on our execution and driving our strategy forward. Our online marketplaces are growing rapidly, with B&Q’s marketplace reaching 35% of its ecommerce sales in October. Screwfix has continued its international expansion by launching as a pureplay online retailer in six new European countries and opening four new stores in France in the quarter. We also continue to harness AI and data to support sales, profit and cash, including by growing our retail media proposition across the group.

“As we move into 2024, we are focused on what is in our control. First, a continued focus on growing market share in the UK, France and Poland with delivery of our strategic growth initiatives. Second, driving productivity gains to offset wage inflation. And finally, delivering on our free cash flow and shareholder returns targets. We expect to see some product cost price inflation, albeit at a significantly lower level, and expect rational retail pricing and competitive price indices at all our banners.

“On the medium-to-longer term outlook, we remain very positive for home improvement growth in our markets and our ability to grow ahead of our markets.”