Published: Thu, August 17, 2017
Business | By Max Garcia

Kingfisher's shares suffer another setback as bad weather impacts sales at B&Q

Kingfisher's shares suffer another setback as bad weather impacts sales at B&Q

Kingfisher (KGF) was the biggest faller on the index, down 5.9% at 291p as the owner of the B&Q and Screwfix stores reported a 4.7% fall in quarterly sales.

Kingfisher also saw sales slip in France, where it trades as Castorama and Brico Depot and where the housing market has also stuttered.

"Q2 has broadly followed a similar course to Q1 although B&Q's performance was impacted by seasonal swings across Q1 and Q2".

Kingfisher also pinned the fall on tough comparatives from a year ago and a strong first quarter in 2017, when better weather meant shoppers bought seasonal products early.

Like-for-like group sales fell by 1.9% to £3.1bn, with United Kingdom sales down by 1%.

Laury previously warned that the results of the European Union referendum had "created uncertainty for the United Kingdom economic outlook", but in today's results said she remained cautiously optimistic over Kingfisher's performance over the second half of the year.

"As previously suggested, Kingfisher could be well advised to spin-off its French division", he said.

Many others have talked about options to save money for the group, and the idea that Screwfix would be better off if it was a standalone company is one that is often discussed.

Chief executive Veronique Laury said there was a "significant amount of change" planned for the rest of 2017.

"The second half should be a good test, however, of the progress being made, once Kingfisher irons out its product availability problems, especially as France's economy seems to be finally showing some positive momentum", he added.

Screwfix was once again the standout performer, seeing a total sales jump of 17.2 per cent to £365 million and a like-for-like boost of 10.8 per cent, although this was not enough to offset wider decline. The weaknesses in the French operations is a longstanding theme, the hope was that we could have seen some improvement here as economic sentiment slowly picks up in Europe. The retail environment will be increasingly tough to operate in due to price pressures, competition and the transition to online shopping.

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