Following today’s release of Kingfisher’s figures for the three months ending 30th April 2023; Jamel Boughedda, Retail Analyst at GlobalData, a leading data and analytics company, offers his view: “Kingfisher’s sales fell marginally by 2.0% on a constant currency basis to £3.3bn in its Q1 FY2023/24, while like-for-like (l-f-l) sales fell by 3.3%, due to a weaker performance across its seasonal categories which were impacted by poor weather conditions over spring. On a l-f-l basis, group seasonal sales plummeted 11.3%, while it proved more resilient across its core and big-ticket categories as consumers prioritised essential items, with l-f-l sales down just 1.3% despite the difficult macroeconomic backdrop impacting discretionary income.
“The UK and Ireland outperformed Kingfisher’s international markets, with sales up 1.3%, driven by an exceptional performance from Screwfix, which saw sales increase 6.5%. Strong demand from trade customers, its market leading online offer and its expansion plans proved a winning combination, with Screwfix opening three stores and remaining on track to open 60 new stores this financial year. As for B&Q, sales fell 1.7% but grew 2.1% across its core and big-ticket categories as bathroom and storage sales performed particularly well. B&Q’s online marketplace continued to see strong growth, reaching 27% of the retailer’s total online sales in April as the proposition provides consumers with a greater choice of products and brands. B&Q’s l-f-l sales of seasonal categories declined 13.7% in March. The poorer weather disrupted sales of several key players, with Wickes also reporting adverse effects on weather-related categories, especially in March. Weather has since normalised, suggesting these adverse effects will be short-lived and sales should be able to recover over the summer period.
“Kingfisher’s international segments proved much weaker, with sales in France down 4.1% and Poland declining 7.7%. As in the UK and Ireland, France was negatively impacted by poor weather, as well as the recent pension reform strikes which reportedly dented footfall to both Castorama and Brico Depot stores. Poland also saw weaker sales, with the group stating that the current high inflation and interest rates are having a negative impact on its performance.
“Going forward, Kingfisher has reiterated its full year adjusted pre-tax profit forecast of £634m in FY2023/24, having seen an improvement in seasonal sales since early April, with its core and big-ticket sales continuing to prove resilient. Kingfisher anticipates further strength across its DIY, DIFM and trade segments despite high inflation and interest rates persisting across its markets. The previously gloomy predictions for the UK housing market are looking unlikely, with asking prices for homes rising in May and mortgage approvals increasing, boosting Kingfisher’s prospects for the rest of the year.”
