B&Q owner Kingfisher slashes full-year guidance

B&Q owner Kingfisher has slashed its full-year profit guidance to £590m, down from £634, as the retailer continues to face hard trading conditions. It comes as operating profit for the six months ended in July was £367m, down 30.9% from the £531m reported in the same period last year. Group sales for H1 were slightly above expectations, with a particularly positive outcome of +1.7% in the UK and Ireland. B&Q LFL sales increased by 1% while Screwfix LFL sales increased by 3.1%. Despite good performance in the UK&I, overall LFL sales were down 2.2%. Total e-commerce sales for the group performed better, with a 7.1% increase supported by the success in the UK, Ireland and France. In H1 the group opened 12 Screwfix stores in the UK and Ireland and is on track to open up to 60 new stores during FY 23/24. In addition, the company has announced the upcoming launch of a new £300m share buyback programme, following the completion of £600m of buybacks of the last two years. Q3 23/24 LFL sales to date are down by 2.4%. Compared to sales trends in Q2 (LFL -1.2%), Kingfisher is seeing continued positive momentum in the UK & Ireland, with good demand from DIY and DIFM/trade customers and improved weather since mid-August supporting growth in both core and big- ticket and seasonal category sales. Thierry Garnier, chief executive officer, said: “We saw good growth in our UK banners, with Screwfix gaining significant market share. At the same time, we faced strong comparatives and a weaker trading environment in Poland, while consumer confidence in France is at a 10-year low. Overall, demand for our core and ‘big-ticket’ categories was healthy, and we were pleased to see an improving volume trend in these categories through the half. “Trading in the UK & Ireland continues to have positive momentum. However, to better reflect our performance in H1 and the trading environment in our markets, we have updated our profit guidance for this year and are proactively managing our operating costs accordingly.” He added: “We remain very positive on the medium-to-long term outlook for home improvement growth in our markets, and confident in our ability to grow market share and deliver on our medium-term financial objectives. Underscoring this confidence, we are today announcing a new £300m share buyback programme, starting in early October.”