Kingfisher holds guidance after Q1 sales fall, but says demand continuing
B&Q owner Kingfisher reiterated annual guidance as it reported a fall in first-quarter sales and announced a £300m share buyback.
The company on Monday said total group sales fell 5.8% to £3.2bn in the three months to April 22 against tough comparators last year when a DIY boom amid Covid lockdowns boosted revenues.
Kingfisher, which owns B&Q and Screwfix in the UK and Castorama and Brico Depot in France along with other European operations added that like-for-like sales fell 5.4% in the quarter but rose 16.2% on a three-year pre-pandemic basis.
The company said it had made a good start to the second quarter with like-for-like sales down 2.5% in the two weeks to May 14, but up 21.8% on a three-year basis.
Despite economic uncertainty, the Kingfisher reiterated full-year 2022-23 guidance for adjusted pre-tax profit of about £770m, down from £949m in the previous year as people working from home spent more on DIY projects. It added that it was “mindful of the heightened macroeconomic and geopolitical uncertainty that has emerged since the start of the year”.
“We continue to effectively manage inflationary and supply chain pressures. As a result, our product availability is now very close to ‘normal’ levels across all our banners, and we continue to deliver value for our customers through our own exclusive brands and competitive prices,” the company said.
AJ Bell investment director Russ Mould said it was always going to be difficult for Kingfisher to match 2021 "when it was one of the few shops able to operate, and people’s desire to do up homes they had been stuck in during lockdown reached a zenith".
“Sales are proving more resilient than some might have feared. This suggests there is still some pent-up demand for home improvement despite the pressures on household budgets.
“While inflationary pressures are a challenge which the company is having to manage, it sounds like the supply chain problems which had been dogging the DIY sector, like so many others, is at least starting to ease.
“This is crucial as one of the absolute musts for a retailer is to have the right products available to customers in the right place and at the right time – so news that Kingfisher’s product availability is approaching pre-Covid levels is a significant milestone."