Kingfisher, the parent company of B&Q and Screwfix, witnessed a dramatic 13 per cent decline in its shares after downgrading its full-year guidance and announcing an anticipated £31 million impact from increased employers’ national insurance contributions.
The DIY retail giant has narrowed its annual pre-tax profit expectations to between £510 and £540 million, following disappointing quarterly sales performance. This revision comes as a significant adjustment from their previous forecast of £510 to £550 million, which was already below the £568 million recorded in the previous financial year.
Chief Executive Thierry Garnier attributed the downturn to heightened consumer uncertainty in both the UK and France during October, particularly following government budget announcements in both nations. The FTSE 100 company reported concerning figures for the three months to October 31, with like-for-like sales declining 1.1 per cent against analyst projections of a 0.2 per cent decrease.
The French market proved particularly challenging, with like-for-like sales falling 4.3 per cent during the quarter, significantly underperforming against consensus forecasts of a 2.6 per cent decline. The company cited weak consumer sentiment and adverse weather conditions as primary factors behind the disappointing performance.
Despite these challenges, Screwfix emerged as a bright spot in the company’s portfolio, delivering sales of £681 million in the third quarter, up from £651 million in the previous year. The trade-focused retailer demonstrated robust growth with a 1.8 per cent increase in like-for-like sales, driven by strong demand from professional customers.
The company’s shares closed at 255¾p on Monday, reflecting growing investor concerns about the DIY sector’s resilience in the face of mounting economic pressures and changing consumer behaviour patterns.
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