Kingfisher resilient in Q1 update

Kingfisher has released its Q1 trading update to April 30, 2023 which showed first quarter sales of £3.3bn. LFL figures were down -3.3% including a -0.5% calendar impact but overall the company had a resilient performance in core and ‘big-ticket’ categories.

The Sales of seasonal categories (18% of sales) were affected by weather conditions, with LFL falling by -11.3% for the period.

The company experienced total e-commerce sales growth of +4.7%, representing 16.9% of Group sales, with the continued strong growth of B&Q marketplace.

On a regional level, UK & Ireland had good performance at B&Q given impact of weather on seasonal sales, plus strong market share gains and positive LFL at Screwfix with trade customers continuing to see strong pipelines. France had resilient performance in core and ‘big-ticket’, with both banners impacted by weather and 10 days of national pension reform strikes. Overall Poland’s year-on-year performance was impacted by strong comparative, with performance vs pre-pandemic levels consistent with Q4 22/23.

Thierry Garnier, Chief Executive Officer, said: “As we move through our key trading season, we are pleased to see that sales in our core and ‘big-ticket’ categories, which make up over 80% of our total sales, are showing continued resilience. The unusually poor spring weather in the UK and France affected our seasonal sales in the quarter, impacting demand for items such as garden and outdoor products. We have however seen an improvement in trading since early April, and anticipate a release of some pent-up demand as the weather continues to improve. Our inventory remains healthy and, in aggregate, is reducing in line with our expectations.

“We continue to execute our strategy at pace, making good progress across all our key priorities. Screwfix is trading well and seeing particularly strong demand from trade customers, with total sales up 6.5%. The business continues to drive its store expansion plans in the UK, Ireland and France. E-commerce sales were another highlight in the quarter, up 4.7%. One of the drivers of this is the continued success of B&Q’s marketplace, which reached 27% of B&Q’s online sales in April, a year after its launch.

“Across the Group, we are maintaining a sharp focus on competitive pricing, while balancing inflationary pressures. With the continued easing of raw material prices and freight costs, we expect to see lower product cost inflation in H2.

“We are comfortable with market expectations for the business this year, and confident in delivering growth ahead of our markets, strong cash generation, and higher returns to shareholders over the medium-term.”