Slump in French sales turns the screw on B&Q owner Kingfisher as shares fall six per cent

 
Rebecca Smith
The DIY lure is going strong in the UK at the moment for Kingfisher
The DIY lure is going strong in the UK at the moment for Kingfisher (Source: Getty)

Kingfisher may well be thinking its French offering could do with a lick of paint after noting a slowdown there in its latest trading update.

Read more: Kingfisher's share price falls as group warns on economic outlook

The figures

The owner of DIY stores like B&Q has reported a dip in sales for the first quarter, with like-for-like sales in the three months to March falling 0.6 per cent to £2.9bn.

That was driven by a 5.5 per cent drop in France, which accounts for around two-fifths of its revenue.

Brighter news in the UK and Ireland though: same store sales were up 3.5 per cent, drilled in by Kingfisher's Screwfix stores where sales rose 12.6 per cent to £362m. B&Q sales were less of a driver, rising 0.5 per cent in the period.

Shares dropped 6.6 per cent to 335.50p in morning trading.

Why it's interesting

The company is in the midst of a hefty revamp, a five-year revamp in fact, and the slight slip in sales for the first quarter reflects both weaker sales in France, which has been a problem for Kingfisher before, and a few headaches with the planned rejig.

Kingfisher did say there had been something of a spanner in the works for its restructuring plan, noting it was facing "some business disruption" given the scale of change it's undergoing, so not all smooth sailing when it comes to merging product ranges and IT systems across its businesses.

Despite this, the firm says it's on track to deliver the next steps in the turnaround.

What the company said

Véronique Laury, Kingfisher's chief executive, said: "We have set ourselves up well for our transformation, which continues in line with our plans. Strong performance in Screwfix and Poland continues, though performance in France remains weak.

"In addition, we are experiencing some business disruption given the volume of change, as we clear old ranges, remerchandise new ranges and continue the roll out of our unified IT platform.

"However, we are on track to deliver our year two strategic milestones. Early customer reaction to our new ranges is encouraging, especially in France where our new unique bathroom ranges are launching first."

Read more: No Brexit storm for Kingfisher as profits jump

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