B&Q owner Kingfisher has reported a drop in like-for-like sales for its second quarter, in what the firm said will be a "challenging" year.
As well as weakness in the French market, the firm said it's dealing with disruption from its restructuring plan, and it didn't have the luck of good weather to boost sales, as it benefited from this time last year.
Shares were down five per cent in mid-morning trading at 291.90p.
Like-for-like sales dropped 1.9 per cent to £3.1bn, which it blamed on seasonal performance at B&Q down 11 per cent. Not so sunny for the firm this quarter, after good weather boosted last year's second quarter and its first quarter of 2017.
The company's tepid performance in France also continued, with like-for-like sales down 3.8 per cent.
Still, DIY group Screwfix put in a strong performance, with like-for-like sales up 11 per cent, which Kingfisher credited to its "leading digital capability" as well as new and extended ranges.
Total sales for the UK and Ireland dipped 2.1 per cent, which the firm was down to a softer B&Q performance offset the bright performance of Screwfix, while total sales in France were down 3.3 per cent.
Why it's interesting
The company is in the midst of a significant five-year revamp, and the firm did say there was ongoing "business disruption" due to its restructuring plan, which entails merging product ranges and IT systems. The owner of DIY stores did though say there was an overall improving trend, and it remains on track to deliver its strategic milestones for the year.
The update comes after the company's shares dipped in May off the back of its update for the first quarter, after noting headaches with its French business, which accounts for around two-fifths of its revenue, then too.
George Salmon, equity analyst at Hargreaves Lansdown, said: "It’s sometimes difficult to get a grip on the underlying direction of travel at Kingfisher, so dependent is the group on the vagaries of the weather. However, with the transformative One Kingfisher plan suffering from disruption and like-for-like sales in both France and the UK in negative territory, there aren’t many bright spots for investors in these results.
"A silver lining of sorts is that it looks like Kingfisher isn’t alone in having difficulties in the UK. The group’s flagship B&Q chain saw like-for-like sales fall 4.7 per cent, which is similar to the 4.3 per cent fall at Bunnings UK, the new owner of Homebase."
What the company said
Veronique Laury, Kingfisher's chief executive, said:
Having been very aware that this year would be challenging given the step up in transformation activity, we already have self-help plans in place to support our overall year two performance, though we remain cautious on the H2 outlook for the UK and France as previously guided.
We remain on track to deliver our Year 2 strategic milestones, and look forward to updating you on our wider progress in more detail at our H1 results.