Kingfisher beats market forecasts
Published: 05 December, 2011
LONDON: B&Q owner Kingfisher Europe's biggest home improvements retailer, beat third-quarter earnings forecasts despite a tough economic backdrop. Mild weather, market share gains and a drive to boost profit margins helped performance
The group, which runs Castorama and Brico Dépôt in France, said today the short-term outlook for consumers in those markets remained challenging but it was confident of coping, helped by a drive to improve profitability by buying more goods centrally, and directly, from cheaper manufacturing centres like China.
Many European retailers are struggling as disposable incomes are squeezed by rising prices, muted wages growth and austerity measures, and amid fears a euro zone debt crisis could plunge the region back into recession.
Kingfisher, which makes about 40% of its sales in Britain and France, said retail profit rose 14% to £273m in the 13 weeks to October 29. That compared with a forecast for £263m in a Reuters poll, and marked a slowdown from 18% growth in the first half.
Sales at stores open over a year rose 1.9% in France, broadly in line with expectations and down from 4.6% in the first half. Mild weather drove a strong rise in sales of outdoor products, with lawnmower sales up 17%.
Like-for-like sales on the same basis in Britain were down 0.9%, improving on a 1.8% decline in a first half disrupted by the closure of rival Focus DIY.
Garden furniture sales leapt 68% as Britons took advantage of autumn sunshine to make up for a wet summer.