Kingfisher shares have shed 6.1 per cent, despite the home improvements retailer announcing a £100m special dividend this morning.
Like-for-like sales at B&Q jumped 9.7 per cent to £1bn in the first quarter, with Screwfix seeing a 12 per cent increase, to £192m.
But investors may not have been so filled with confidence over the detail in the company’s outlook.
For one, performance in economies outside the UK wasn't so good. Weaker consumer confidence in France offset the encouraging signs in the UK and Poland, and group-wide comparable sales were up by just 6.1 per cent.
Espirito Santo Investment Bank has called the figures “disappointing”, despite the impressive headline.
It highlights the two percentage point decline in the UK gross margin which, it says, “points to the absence of strategic visibility in this area from the new management”. It also hammers home what the lender called the “growing issue” of discounter pricing at the bottom end.
What's more, the solid first quarter trading is enhanced because it compares with a “very difficult start” last year, said Kingfisher. Speaking on Radio 4 this morning, chief executive Sir Ian Cheshire said "we forget how awful last year was with snow in March”, which meant a "big bounce in seasonal trade" this year.
The slowing Chinese property market also impacted international performance, with B&Q China seeing sales down five per cent to £68m - a 4.4 per cent like-for-like decline.
Cheshire stressed that B&Q has not been affected by a London housing bubble.
The special dividend of 4.2p per share will be paid out on 25 July.
Espirito Santo says it expects market consensus estimates to reduce by one to two per cent today, settling at profit before tax of around £800m. It reiterates its sell rating.