B&Q owner Kingfisher sees sales slide in ‘disappointing’ third quarter
The group said B&Q’s UK and Ireland like-for-like sales declines accelerated to 3.4% in the quarter to October 31.
B&Q owner Kingfisher has seen shares come under pressure after its new boss revealed “disappointing” recent trading with another slide in sales at the DIY group.
Shares slumped as much as 9% at one stage as chief executive Thierry Garnier admitted there is “much to do” to turn around the firm’s fortunes.
The group revealed B&Q’s UK and Ireland like-for-like sales declines accelerated to 3.4% in the quarter to October 31.
But this was offset once more by growth of 3.7% at its Screwfix arm, albeit marking a slowdown on the chain’s first-half performance.
We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel Thierry Garnier, chief executive
Sales in France also remained under pressure, tumbling 6.1%, with a 5.2% drop for its other international operations.
Mr Garnier, who took over eight weeks ago from former chief executive Veronique Laury, said Kingfisher continues to suffer from a lengthy overhaul programme and tough market conditions.
The group also cautioned trading would remain tough for the final quarter across all its operations, with the UK continuing to be impacted by disruption to sales from range changes as well as a tough market backdrop.
Mr Garnier said: “It is clear that there is much to do to improve our performance.
“Kingfisher’s trading during the third quarter was disappointing.”
He added: “We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel.
“Altogether, this has brought disruption to sales and has distracted the business from focusing on customers.”
He said he was prioritising plans to fix issues with the group’s IT and supply chain in France and halting some initiatives to concentrate on reversing sales declines.
“The effect of these changes will not be immediate,” he said.
Kingfisher is in the middle of a swingeing overhaul spearheaded by previous boss Ms Laury, which has seen the group shut 65 B&Q shops and slash about 3,000 jobs.
It has also been shaking up its ranges and improving its online offering.
But the group has admitted this has taken its toll on performance, with recent half-year results showing profits dropped 12.5% to £245 million.
Richard Hunter, head of markets at Interactive Investor, said Kingfisher’s latest share price drop could threaten the firm’s position as a blue chip stock.
He said: “Even before today’s calamitous drop, the shares had plunged 20% over the last six months and 19% over the last year, during which time the wider FTSE 100 added 5.4%.
“This further decline brings Kingfisher’s status as a FTSE 100 constituent into question and without some improvement in the lead-up to the December reshuffle, the company is a strong contender for relegation.”