B&Q upbeat on profits despite cooling
B&Q owner Kingfisher has seen sales drop as the pandemic-fuelled DIY boom lost steam, but it told investors it will nevertheless post profits at the top end of forecasts.
The group revealed total revenues of £3.25 billion for the three months to October 31, following a 2.4 per cent decline in like-for-like sales against the same period last year.
The company, which also owns Screwfix, failed to keep pace with the strong growth it saw last year as locked-up customers took the opportunity to spruce up their homes and gardens, but like-for-like sales were up 15 per cent against pre-pandemic levels.
Kingfisher reported a 3.5 per cent fall in like-for-like sales in the UK as it was weighed down by the decline at B&Q.
The retail group said B&Q has seen "resilient demand" but it dropped against "very strong" comparative figures from last year.
It hailed strong sales of outdoor, building and joinery items against pre-pandemic levels, while B&Q'S tradefocused arm Tradepoint saw continued growth.
B&Q also opened two stores in the quarter, including a concession within an Asda supermarket store.
Meanwhile, the FTSE 100 group was boosted by Screwfix, which posted a 4 per cent jump in sales.
The trade tools and hardware retailer saw particularly strong demand and was boosted by its expansion, with the chain opening 11 new stores over the quarter.
Kingfisher added that it has seen a "strong start" to the fourth quarter and is positive about its profitability for the year.
It said it is on track to post adjusted pre-tax profits at the top end of its range of between £910 million and £950m for the financial year,
Thierry Garnier, chief executive of Kingfisher, said: "Since the start of this year we have maintained, and in many cases improved, our product availability,which is amongst the best in our industry. This has supported our market share gains and allowed us to upweight promotional initiatives in the quarter. We have also continued to manage inflation pressures effectively, while retaininghighly competitive pricing ."
Adam Vettese, analyst at investment platform etoro, said: “The abrupt shift in working practices at the start of the pandemic led to a DIY boom with remote working homeowners keen to spruce up their properties.
“B&Q owner Kingfisher’s latest trading update shows that initial Diy-mania has tailed off a little since last year, but that sales are still well up on two years ago, just before the pandemic struck.
“That is because while the economy has reopened and people are out and about more, many of us are still predominantly working at home. And when people spend a lot of time at home, they want their surroundings to be nice.”
AJ Bell investment director Russ Mould noted: “Lockdown winners were always going to face tough year-on-year comparatives in 2021 and no more so than Kingfisher. The DIY boom that kicked off in 2020 has had considerable legs and still shows positive momentum.”