By Luke LONDON, Sept 17 – B&Q and Castorama owner Kingfisher (KGF.L) raised the bottom line of its annual profit forecast, saying seasonal sales trends remained weak despite demand for “big-ticket” home improvements such as kitchens and bathrooms rebounding in early July.
Shares in the FTSE 100-listed European retailer, which also owns Britain’s Screwfix and France’s Brico Depot, rose 7% on Tuesday to their highest in more than two years.
High interest rates and macroeconomic uncertainty are weighing on consumer demand for big home improvement projects on both sides of the Atlantic. Last month, US giants Home Depot (HD.N) and Lowe’s (LOW.N) both warned about the outlook.
Kingfisher reported flat profits in the first half, but said there were “positive early signs” of improvement in the property market , particularly in the UK.
Chief Executive Thierry Garnier told reporters that the worst “high-priced” category remains kitchens.
“It’s two trends. First, we’re seeing less (demand for) kitchens, and second, when you sell kitchens, you sell affordable kitchens,” he said.
However, he added: “We saw a kind of plateau in the first and second quarters, not worse, but stable.”
He also said sales of seasonal products such as outdoor furniture, grills, fencing and decor have rebounded after a very poor April, May, June and early July.
Kingfisher said the company is well positioned for growth in 2025 and beyond and now expects adjusted pretax profits of 510 million to 550 million pounds ($674 to $727 million) in 2024/25, compared with a previous forecast of 4.9 billion to £550 million. The company’s revenue in the 2023/24 financial year was £568 million.
In the first half of the year ended July 31, profit fell 0.5% on a like-for-like basis to £334 million, while sales fell 2.4% year-on-year. The company said it gained market share in the UK and Poland, while soft sales in France were broadly in line with market conditions.
“Overall, trading in the first half was in line with our expectations,” Garnier said.
“This is the basis for customers to continue to repair, maintain and renovate existing homes, driving resilient sales trends across our core product categories.”
The group said like-for-like sales fell 0.3% so far in the third quarter.
($1 = 0.7570 British pounds)
