Following today’s release of Kingfisher’s figures for the 52 weeks ending 31st January 2025; Sophie Mitchell, Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “Kingfisher has ended its FY2024/25 with sales down 0.8% on a constant currency basis, dragged down by a poor performance in France where sales fell 6.1%, and due to the continued weakness of big-ticket sales in the UK, where total sales grew just 1.2%. However, its UK business delivered profit growth of 0.6% in spite of this and higher operating costs. Its underperformance in France, where profits declined 29.8% as it witnessed poor sales performance in all categories other than trade, was the big dampener to Kingfisher’s overall pre-tax profit, which declined 7.0% to £528m. Kingfisher has given a pessimistic outlook for its FY2025/26, indicating that it anticipates either a decline in profits or a marginal increase at the top end with guidance of between £480m and £540m, as it accounts for increased operating costs in the UK and France as well as uncertainties in consumer sentiment, leading to its share price falling over 10% this morning.
“In the UK, trade was the key driver of growth with “robust” trade demand at Screwfix contributing to its 4.0% increase in sales and B&Q’s trade banner TradePoint sales rising 6.4%, reaching its highest annual penetration of B&Q sales at 23.4%. In contrast, B&Q saw a slight decline in overall sales of 0.7%, as it struggled with weak big-ticket furniture demand, despite a slight improvement in Q4. Its trade sales for the year did however underperform relative to UK competitor Wickes, which saw its TradePro business grow 14% in the year to 28 December 2024 as its loyalty scheme and price points gave it an edge. Kingfisher must therefore focus on effective advertising, enhancing its trade loyalty scheme and app which launched in October 2024, especially as it has expressed a mixed outlook for its FY2025/26.
“Although consumer sentiment in the UK has been relatively resilient compared to France, there are near-term employment and mortgage rate uncertainties facing UK households as well as a lag in housing transactions being converted to home improvement spend. A focus on its key strategic investments will therefore be crucial to its UK success. The expansion of its B&Q Local format stores to include a test of its TradePoint offer, Deliveroo delivery partnership, B&Q Marketplace expansion, new Screwfix stores (the group opened 30 this year including seven ‘Screwfix City’ ultra-compact format stores) and the extension of Screwfix Sprint should at the very least drive like-for-like (l-f-l) sales growth. This greater focus on ecommerce and convenience will be beneficial so long as it ensures well-curated convenience store product mixes and competitive fulfilment options within its ecommerce enhancements.
“French fascias Castorama and Brico Dépôt both produced weak results, seeing sales decline 6.8% and 5.3% respectively, as consumer confidence remained weak. With the group seeing positive early results from its Castorama marketplace (marketplace sales penetration of around 12% in Q4) which launched in Q1, and in its new trade proposition in both fascias (Brico Dépôt trade penetration was 12.8% in January compared to 8.6% at the start of FY2024/25), this should be a focus for driving growth, much like in the UK. The group’s Polish arm had a solid performance, with sales rising 3.2% on a constant currency basis as it saw improvements in its l-f-l big-ticket sales trends, in contrast to the rest of the group, and progress in its trade proposition. Kingfisher therefore anticipates its Polish fascia to continue to perform better than its French fascia in FY2025/26.”
