Kingfisher: B&Q owner sales dragged down by weakness in overseas brands
B&Q owner Kingfisher saw the success of its UK brands dragged down by struggles overseas, as sales in France and Poland took a dip.
The FTSE 100 firm suffered falling sales in its French Castorama (-2.2 per cent) and Brico Depot (-2.3 per cent) brands and in Poland (-1.1 per cent), while sales grew by more than three per cent at UK brands B&Q and Screwfix.
The DIY firm has been battling stagnant sales in Poland and France – where Castorama is among Kingfisher’s longest-struggling brands, according to analysts.
Kingfisher’s share price jumped by two per cent on Tuesday’s early trading to 302p, leaving the stock up eight per cent over the last year but down more than 10 per cent since the pandemic-era DIY boom.
The company has focussed on cutting costs in recent years, as it offloaded £120m in excess weight last year.
The company notched an adjusted pre-tax profit of £560m, up six per cent from last year and in line with analysts’ expectations.
Total sales across Kingfisher’s brands edged up by only 0.2 per cent.
B&Q and Screwfix will be looking forward to the DIY push that comes each spring, as competitors say the UK’s ageing housing stock keeps demand for home improvement high.
But Kingfisher’s brands, like its rival Wickes, has struggled in recent years to shift its big-ticket items like kitchen renovations, with Brits cutting back discretionary spending as they feel the crunch.
The French Castorama brand is suffering most from the drop in appetite for big buys, with sales for these products down 4.5 per cent year on year.
Kingfisher said B&Q and Screwfix’s strong performance is due to a focus on e-commerce, strong sales boost during seasonal periods and B&Q’s acquisition of a string of Homebase stores.
B&Q and Screwfix expand aggressively
Kingfisher continued its physical expansion in the UK, with Screwfix opening 32 new locations and closing five.
B&Q opened 10 new stores – eight of which were converted from former Homebase outlets – and closed three, as Kingfisher saw 41 net openings across its global brands.
Kingfisher said it hopes to push growth by focusing on sales to tradespeople because they visit more frequently and spend more than the average customer.
The company has created specialist trade zones in each of its stores and saw growth in trade sales of five and four per cent at B&Q and Screwfix, and as much as 47 per cent in Castorama Poland.
The firm announced a new £300m share buyback programme, having bought back £1.2bn in shares since 2021.