Soggy sales at Kingfisher

Published:  31 May, 2012

LONDON: Sales fell last quarter at Kingfisher’s UK and Irish stores. Total sales in the 13 weeks to 28 April were down 3.6% on the previous year, or 1.3% on a constant-currency basis, at £2.63bn as poor weather across Europe affected footfall. Like-for-like sales were down 4.8% on a constant currency basis.

Sales in the UK & Ireland were off 7% at £1.1bn. Like-for-like sales were down 10.4% for the B&Q owner, which was a better performance than the 11% decline predicted by British stockbroker Panmure Gordon. Retail profit in the UK and Ireland declined 9.8% to £75m.

The performance was slightly better than broker Jefferies was expecting; the US investment bank had forecast first-quarter sales would be down by almost 4% year-on-year, or down 2% on constant currency basis. Retail profit fell 8.6%, or 5.5% on a constant currency basis, to £160m.

Kingfisher said that sales and profit were affected by record adverse weather in the UK and across continental Europe, and compounded by the comparison with a favourable first quarter this time last year.

Seasonal sales across the group were down 22%, denting profit by around £29m, but on-going gross margin and cost initiatives helped limit overall first-quarter profit decline.

"We anticipated the first quarter would be challenging compared with last year's strong growth, which was boosted by favourable spring weather and public holidays, but an extremely wet April this year in the UK and France compounded the difficulty, adversely impacting sales of outdoor and seasonal categories," said Ian Cheshire, Kingfisher's group chief executive.

Net cash at the end of the reporting period was £165m, down from net cash of £283m a year earlier.

"With the first quarter typically one of the least significant of the year and with the key summer season still ahead of us, we remain confident we are well prepared to capitalise on any improvement in conditions and deliver a solid full-year result," Mr Cheshire said.

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