Castorama and Brico Dépôt sales suffer in Q3

Kingfisher has reported on Q3 trading, covering the 13 weeks ended 1 November 2014.

Kingfisher reports Q3 sales of £2.8 billion, down 0.9% LFL and retail profit of £225 million, down 6.9% in constant currencies.

Kingfisher France

Kingfisher France total sales declined by 2.7% (-4.0% LFL) to £1,064 million in an on-going soft market impacted by weak consumer confidence, higher taxes and a declining housing and construction market.

Across the two businesses, one net new store was opened and one was revamped, adding around 1% new space during Q3.

Gross margins were down 50 basis points, with on-going self-help initiatives offset by higher price promotional activity. Despite continued focus on cost control including lower levels of variable pay, retail profit declined by 8.4% to £120 million.

Castorama total sales declined by 4.2% (-3.4% LFL) to £585 million. According to Banque de France data*, sales from the home improvement market were down around 3% in the quarter.

Sales of seasonal products were broadly flat. Sales of indoor and building products were down around 4%, in part impacted by weaker sales of heating ranges (down 20% and contributing around a third of the total LFL decline) due to mild weather.

Brico Dépôt, which more specifically targets trade professionals and heavy DIYers, was impacted by the on-going slow house building market* with new housing starts down around 5%. Total sales declined by 0.9% (-4.6% LFL) to £479 million.

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Sir Ian Cheshire, Kingfisher Group Chief Executive, said:

“Trading conditions in our largest and most significant market, France, were particularly difficult and deteriorated across the quarter, impacted by the weak economic backdrop. In the UK however, where conditions have been more favourable, we have delivered LFL growth with Screwfix performing particularly well, delivering a 25% increase in sales on top of very strong growth last year. Overall, we remain cautious on the outlook, especially in France, and continue to focus on margin and cost initiatives to support our performance.

“As I prepare to step down as Group Chief Executive on 8 December, I would like to take this opportunity to thank the 79,000 staff at Kingfisher for their hard work and support over the past seven years. I am proud of what we have achieved together and I am delighted that Véronique Laury will be succeeding me. Her passion for product, for customers and for home improvement together with her 26 years’ experience in the sector, make her the right choice for the role and I wish her every success in the future.”

Véronique Laury, Kingfisher Group Chief Executive designate, said:

“I am delighted to be succeeding Sir Ian. He leaves a strong, and more sustainable business with a clear sense of purpose. I believe Kingfisher has an important role to play in improving people’s lives by helping them to improve their homes. With more than 26 years in home improvement, and 11 years at Kingfisher, I know our employees and our businesses well and I understand the reality of our customers’ lives. I look forward to putting my experience to work to build on Sir Ian’s legacy with passion, energy and pace.

“I am also very pleased to have announced Marc Ténart as my successor as Chief Executive of Castorama France. Marc has been in the Group for 14 years, holding senior roles at Castorama France and previously Chief Executive of our Brico Dépôt business in Spain, so I am confident he will do a great job.”

Source : Kingfisher
http://www.kingfisher.com/