B&Q focusing on rebuilding sales
A tough summer for B&Q owner Kingfisher sent its shares into reverse after it revealed weaker than expected trading in many of its markets.
The company has been hit by softer trading in France and Poland, while revenues at B&Q were down by 3.2% on an underlying basis in the 10 weeks to July 12 as sales of outdoor and seasonal products slumped 8% on a year ago.
Chief executive Sir Ian Cheshire said the quarter was always expected to be difficult after good weather brought forward sales into the previous quarter and the company came up against tough comparisons with last year.
However, he added: "Our markets in the second quarter, notably in June, have been slower than anticipated particularly in France and Poland."
Shares slumped by more than 7% in the wake of the update, which led retail analyst Freddie George of Cantor Fitzgerald to cut his 'top end of the range' forecast for profits this year from £805m to £780m.
He said the distraction of the World Cup, which led to weakness in many home categories, was another factor in the disappointing performance.
Kingfisher is the world's third largest home improvement chain, with 1,134 stores in nine countries in Europe and Asia. Its main retail brands are B&Q and Screwfix in the UK and Ireland and Castorama and Brico Depot in France.
Screwfix sales grew by 11.8% on a like-for-like basis but the supplier of tools and hardware products, which trades from 356 sites, failed to prevent overall UK and Ireland underlying sales falling by 1.3% in the quarter.
The stronger first quarter meant overall UK and Ireland sales rose by 7% overall and by 4.7% on a like-for-like basis in the year to date.
Underlying sales in France were down 2.2% in the quarter.