Warmer weather lifts B&Q sales in Q2
● Retailer reports sales growth days after rival unveils store closures
B&Q is celebrating a bounceback in sales after warmer weather in the UK, but its French operations suffered a poor performance.
The home improvement company’s owner Kingfisher posted group sales of £3.26 billion for the second quarter, resulting in like-for-like sales growth of 1.6 per cent.
Like-for-like sales were up by 4.2 per cent across the UK and Ireland, a figure that also includes trade tools retailer Screwfix, but fell by 1 per cent in France.
Despite facing what the company called a “weak” UK consumer backdrop, sales at B&Q rose 3.6 per cent to just over £1bn, while Screwfix’s sales climbed 5.5 per cent to £407 million. The latter also opened 12 new Screwfix outlets during the second quarter.
The results in the UK were a sharp turnaround from the first quarter, which saw group sales plummet by 9 per cent and B&Q’S revenues knocked 8.8 per cent by the Beast from the East.
Kingfisher blamed weaker footfall and the impact of an ongoing transformation plan
0 B&Q’S sales were up 3.6% in the second quarter
VERONIQUE LAURY, CEO
for DIY store Castorama dragging sales in France, with likefor-like sales dropping by 3.8 per cent over the period.
Its B&Q business is also in the middle of a structural overhaul, which has seen it close down 65 shops and slash around 3,000 jobs in the UK and Ireland over the last few years. It currently has some 300 stores across the UK.
Chief executive Véronique Laury stated: “We started our transformation two-anda-half years ago and are on track to deliver our strategic milestones for the third year in a row. In the second quarter, I’m pleased that we grew our sales after the exceptionally harsh weather conditions in the first quarter.”
The DIY chain recently announced that it was investing £100m as part of plans to lower its prices.
It has been cutting back on its promotional activity and has unified the buying functions across its divisions.
B&Q’S sales bump comes shortly after rival Homebase announced plans to close 42 of its stores, ten of those in Scotland, with the likely loss of 1,500 jobs.
Neil Wilson, chief market analyst at Markets.com, cited weather conditions as a key factor in the group’s result. He said: “After the Beast from the East took a nasty chunk out of first-quarter sales, this is a welcome return to like-forlike growth.
“Sometimes retailers can blame it on the weather and in the first half Kingfisher has had both the good and the bad.”
Also commenting was George Salmon, equity analyst at Hargreaves Lansdown, who said the results showed a marked improvement at first glance, but were evidence that the UK’S DIY obsession was waning. He said: “The strong sales figures are more a function of a scorching summer than any underlying progress.
“Strip out the impact of summer items like barbecues and garden furniture, and sales, which headed south over the winter, have continued to fall.
“There are a few crumbs of comfort though. Tradefocused operations Brico Dépôt [in France] and Screwfix continue to pull in more business, while management is confident margins will improve this year.”
Shares in Kingfisher closed down 4.8 per cent at 274.5p.
“In the second quarter, I’m pleased that we grew our sales after the exceptionally harsh weather conditions in the first quarter”