Brico Dépôt And Castorama See LFL Decline Amid Challenging Trading Conditions

Kingfisher plc has published a trading update for the 2024/2025 financial year.

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FRANCE 

Despite challenging trading conditions, Castorama and Brico Dépôt both continued to deliver on their strategic priorities, with their respective sales ahead of the market (as measured by GfK). In H2, sales trends improved (H2 LFL -4.9% vs H1 LFL -7.2%) driven by an improved performance in core, seasonal and ‘big-ticket’ categories. Our new kitchen ranges continue to land well, delivering LFL growth in Q4. Underlying sales trends in core categories were slightly lower from Q3 to Q4, driven by the market backdrop. Seasonal sales were also lower, impacted by unfavourable weather conditions. Gross margin % increased by 80 basis points, reflecting the effective management of product costs, supplier negotiations and retail prices, lower stock provisions driven by better inventory management, and lower logistics costs. This was partially offset by channel mix, reflecting the growth of trade customer sales.

Retail profit decreased by 29.8% to £95m (FY 23/24: £139m, at reported rates), with lower gross profit partially offset by lower operating costs. Operating costs decreased by 1.6% as a result of structural cost savings, and swift action taken during the year to flex staff costs and discretionary spend in response to the weaker trading environment. The savings were partially offset by higher technology costs and cost inflation, including YoY increases in staff pay rates. Retail profit margin % decreased by 80 basis points to 2.4% (FY 23/24: 3.3%, at reported rates).

Castorama total sales decreased by 6.8% (LFL -6.6%) to £2,014m. Sales trends improved in H2 across all categories, with LFL sales performance in the building & joinery, outdoor and tools & hardware categories better than the overall Castorama average. ‘Big-ticket’ sales trends saw an improvement in Q4 (vs Q3), driven by kitchen sales. Seasonal sales were lower in Q4, impacted by milder weather conditions in the latter part of the quarter. Castorama’s total e-commerce sales increased by 13.4% YoY, with ecommerce sales penetration increasing to 7% (FY 23/24: 6%; FY 19/20: 2%), benefiting from positive early results from its marketplace (launched in Q1 24/25) and Hello Casto, an in-house developed AI virtual assistant. As of 31 January 2025, Castorama had a total of 94 stores in France.

Update on Castorama’s store restructuring and modernisation plan

Castorama is making rapid progress in the restructuring and modernisation of its lowest performing stores, completing or with work ongoing on a total of 13 stores in FY 24/25. Castorama completed four rightsizings in the year. Our previously rightsized stores (Gonesse and La Rochelle) have delivered low double-digit % sales density improvements on average vs FY 19/20, significantly higher than the Castorama France average. All rightsized stores, at the same time, benefit from a comprehensive store refit. Additionally, in FY 24/25, Castorama commenced work on one comprehensive store refit, similar to the concept successfully applied at the Castorama Englos store last year. The refitted Castorama Englos store delivered a c.5%pts higher LFL performance than the Castorama France average. Five more lowperforming stores have also benefited from a lighter-touch refresh. The transfer to Brico Dépôt of one 16 low-performing Castorama store is in motion, with the store closed in H2 and re-opening in H1 25/26 under the Brico Dépôt banner. The first two franchises are on track to begin in H1 25/26. The business is planning to commence work on 11 further stores in FY 25/26 across these four avenues.

Brico Dépôt total sales decreased by 5.3% (LFL -5.7%) to £1,869m. Sales trends improved in H2 (LFL 4.5%) driven by the performance of ‘big-ticket’. The kitchen category delivered LFL growth in Q4, driven by the implementation of new ranges. Despite this strong performance, overall LFL sales trends were softer in Q4, due to the weak market backdrop and the impact of unfavourable weather on seasonal category sales. E-commerce sales decreased by 6.8%, against strong prior year comparatives (FY 23/24 e-commerce sales: +14.7%). E-commerce sales penetration was maintained at 5% (FY 23/24: 5%; FY 19/20: 2%). The business made strong progress in the development of its trade customer proposition in the year, with service desks, dedicated colleagues and a new loyalty programme rolled out to all stores in February 2024, following successful trials. Brico Dépôt will recruit new trade sales partners in FY 25/26, following the success seen at TradePoint in the UK. Trade sales penetration reached 12.8% in January, up 4.2%pts since the start of FY 24/25. Brico Dépôt opened one new store in the year, with a total of 126 stores in France as of 31 January 2025.

Source : Kingfisher plc

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