Kingfisher sees UK spring boost but Polish sales slump weighs on outlook

Kingfisher, the owner of B&Q and Screwfix, has reported a modest recovery in its first-quarter sales, led by a 12.6% surge in seasonal products like gardening and outdoor living ranges. The British DIY group, listed on the FTSE 100, recorded an overall like-for-like sales increase of 1.8% to £3.3 billion, reversing the 1.7% decline experienced in the previous quarter.

Despite the stronger performance in the UK, where sales rose 5.9%, the company faced headwinds in other key markets. Worsening geopolitical and economic uncertainty led to a 3.2% drop in Poland, while sales in France also declined by the same percentage. Thierry Garnier, Kingfisher’s CEO, remarked that the year had started positively but acknowledged mixed consumer sentiment across various markets, particularly in Eastern Europe.

The UK and Ireland proved to be bright spots, benefitting from warmer weather that encouraged homeowners to focus on garden and home improvement projects. Demand for outdoor ranges provided a key boost, compensating for weaker sales in core categories such as building materials and paint, which declined by 0.8%. Higher-ticket items, including kitchens and bathrooms, saw only a marginal 0.1% drop, indicating some resilience in big-ticket sales for the second consecutive quarter.

Kingfisher maintained its full-year profit forecasts, projecting adjusted pre-tax profits to range between £480 million and £540 million, alongside free cash flows of £420 million to £480 million. The group credited market share gains in the UK and Ireland as a driver of these optimistic projections, along with the collapse of rival Homebase, which has removed a major competitor from the market.

However, difficulties in France and Poland, which together account for a significant portion of Kingfisher’s revenue, remain a concern. Sales in the French division, which represents 30% of the group’s overall earnings, continued to be affected by ongoing economic pressures and a restructuring process currently underway. Polish sales were hindered by geopolitical instability, adding to worries over the company’s European outlook.

Analysts have maintained a cautious tone. Though market experts from Royal Bank of Canada highlighted increased seasonal spending on home improvements, many agreed that better performances in France and Poland were essential for long-term stability. While Kingfisher’s shares declined by 3.4% to close at 285.75p following the update, the company’s financial outlook suggests some optimism for the months ahead.