Analysts cut forecast for B&Q due to wash-out summer

Most retailers are despairing about the wash-out summer, which has seen fewer consumers on the high street and quashed any appetite to splash out on fashion, festivals or barbecues.

One of the hardest hit is Kingfisher, parent company of B&Q, where 25pc of its sales in the summer months are seasonal such as barbecues, garden furniture and plants.

The wettest April on record meant that first quarter trading fell 10.4pc. And most analysts think life will have only improved a little after the wettest June on record. Rival Homebase, owned by Home Retail Group, suffered an 8.3pc slump in sales during three months to June 2. The group said 80pc of the decline was because of the weather.

Deutsche Bank has cut its forecast for second-quarter sales from a 4pc rise to a 1pc increase at B&Q and the broker has pencilled in a £10m markdown for writing off stock such as plants. Nomura is forecasting the Kingfisher group will report an overall fall in like-for-like sales of -0.2pc.

Ian Cheshire, the chief executive, said after the April wash-out that he was "philosophical". Whether he remains as phlegmatic this time around remains to be seen. Investors will also be keen to hear any update on the conditions at Kingfisher's French stores, which until recently had remained immune from the eurozone crisis, but during the previous quarter started to look less robust.

Source: The Telegraph
http://www.telegraph.co.uk/finance/economics/9401724/The-week-ahead-in-business-and-economics-July-16-20.html#