Surging demand for DIY products amid the coronavirus lockdown is set to see B&Q owner Kingfisher deliver rising half-year profits as it revealed that online sales have more than tripled.
Shares in the retailer jumped as much as 12% as it said group like-for-like sales have risen 21.6% in its second quarter so far to July 18.
Group online sales rocketed more than 200% in May and June amid the trend for home improvements as lockdowns across Europe forced households to stay at home.
Trading was also boosted by cost-cutting and the phased reopening of stores in the UK and France since mid-April.
Kingfisher said like-for-like sales across the UK and Ireland – where it also owns Screwfix – jumped 25.9% last month, while sales leapt 33% in France, where it trades as Castorama and Brico Depot.
While we are entering the second half with a favourable trading backdrop, second-half visibility remains low given uncertainty around Covid-19 and the wider economic outlookKingfisher
Sales have continued to remain strong in July, with UK and Ireland like-for-like growth of 19.6% in the week to July 18 and group online growth of 183.3%.
Kingfisher said: “Based on the strong sales seen to date in the second quarter, combined with cost reductions benefiting the first half, the company anticipates its half-year adjusted pre-tax profit to be ahead of prior year.”
But it held off from giving guidance on the full-year out-turn, with group year-to-date same-store sales still showing the impact of the lockdown, down 3.7%.
It added: “While we are entering the second half with a favourable trading backdrop, second-half visibility remains low given uncertainty around Covid-19 and the wider economic outlook.”
The update comes after Kingfisher saw pre-tax profits fall to £103 million for the year ending January 31, compared with £300 million the previous year, mainly due to a £441 million hit in exceptional costs, though sales fell 1.5% to £11.5 billion.
This is the tailwind Kingfisher has desperately needed to get back on its feet after such a long period of strugglingRuss Mould, AJ Bell
Russ Mould, investment director at AJ Bell, said: “It’s been a long time since DIY shops group Kingfisher delivered some good news.
“Unsurprisingly trading has been very strong in the second quarter as households spend lockdown doing up their homes.
“This is the tailwind Kingfisher has desperately needed to get back on its feet after such a long period of struggling.”