Kingfisher Q3 Trading Update

At 7am this morning Kingfisher announced their Q3 Trading Update for the period ending 31st October 2017. 

• Overall Kingfisher Group Q3 LFL down 0.5% reflecting continued weak sales in France and slightly lower impact from business disruption than H1.
• Remain comfortable with FY 17/18 consensus underlying PBT expectations.
• Remain on track to deliver our full year strategic milestones.
• Returned a further £237m (76m shares) year to date via share buyback of previously announced c.£600m capital return.

Download the full trading release here.

Véronique Laury, Chief Executive Officer, said:

“Q3 has followed a similar course to the first half. We have seen strong growth at Screwfix and Poland offset by continued weak sales in France, alongside some business disruption from our ONE Kingfisher plan, principally reflecting product availability and clearance. We continue to act on the causes of this disruption, which we are confident will ease.

“We remain on track to deliver our full year strategic milestones, for the second year in a row. With plans in place to support our overall performance, we remain comfortable with full year profit expectations.

“We remain confident in our ability to deliver our long-term plan and in the financial and customer benefits it will generate. Early customer reaction to our new ranges continues to be encouraging. We recognise that the transformation plan involves a lot of change for our colleagues and appreciate their continued hard work and expertise.”

Download an overview of the Kingfisher business here.

Q3 trading highlights by division (in constant currencies):

UK & IRELAND

• Total sales +2.5%. LFL +1.5% reflecting continued strong Screwfix performance and modest price inflation.
• B&Q UK & Ireland sales -2.9% (LFL -1.9%) reflecting annualisation of completed store closure programme. LFL of seasonal -7.1% reflecting a strong comparative (Q3 16/17: +5.3%). LFL of non-seasonal, including showroom -0.6%
• Screwfix sales +16.6%. LFL +10.2% driven by its leading digital capability, new and extended specialist ranges and new outlets

FRANCE

• Total sales -3.5% (LFL -4.1%). Sales for the home improvement market (Banque de France data +0.6% in Q3.
• Castorama sales -2.6% (LFL -3.2%). LFL of seasonal -9.3% reflecting a strong comparative (Q3 16/17: +5.9%). LFL of non-seasonal, including showroom -2.0%.
• Brico Dépôt sales -4.6% (LFL -5.2%).

OTHER INTERNATIONAL

• Sales in Poland +6.1% (LFL +6.0%) reflecting a continued good performance in a supportive market. LFL of seasonal +4.7% against a strong comparative (Q3 16/17: +7.8%). LFL of non-seasonal, including showroom +6.1%. 

Analysis & Comment - Steve Collinge

No real surprises here, with Screwfix continuing to deliver strong, double digit, like for like growth of +10.2% and encouraging results coming from the Polish business at +6.0% like for like. 

B&Q sales were pretty much as expected at -1.9% like for like, recovering from poorer Q2. This performance emphasises the trouble Bunnings/Homebase are in, after they announced an -11.9% like for like decline for the similar cross-over period July to September 2017.

Read - Homebase drags sales down at Bunnings.

The seasonal performance in B&Q is concerning (-7.1% like for like) although due almost entirely to the stronger end to the garden season last year and once we get to the year end results, will probably mean the like for like performance with B&Q will improve again.

The French business continues to decline and worryingly underperforms the overall French DIY market.

Source: Insight DIY Team & Kingfisher PLC press release.

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