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B&Q and Screwfix owner downgrades profit guidance

Kingfisher, which owns B&Q in the UK and Castorama in France, has lowered its full-year profit guidance. The group reported that while retail and trade consumer trends remained resilient in the UK, market trends in France were weaker than expected.

Despite UK sales growing 3.3% in the third quarter to 31 October, a 8.7% revenue drop in France has impacted its profit forecast.

“In France, our performance was impacted by a weak retail market, as well as a delayed start to insulation, plumbing and heating sales – to which Brico Dépôt is more heavily weighted – due to unusually warm autumn weather, and strong prior year comparatives in these categories,” explained Thierry Garnier, chief executive officer, Kingfisher.

Furthermore, total group sales fell by 2.1% over the quarter to £3.2bn, with like-for-likes down 3.9%. The trend has continued into its final quarter of the year with sales down 3.4% in the three weeks to 18 November.

Kingfisher has therefore lowered its profit guidance from £590mn to £560mn for the year. Looking ahead to 2024, the DIY retail giant stressed it will focus on what it can control.

“We continue to focus on our execution and driving our strategy forward. Our online marketplaces are growing rapidly, with B&Q’s marketplace reaching 35% of its ecommerce sales in October,” added Garnier.

“Screwfix has continued its international expansion, by launching as a pure-play online retailer in six new European countries, and opening four new stores in France in the quarter. We also continue to harness AI and data to support sales, profit and cash, including by growing our retail media proposition across the group.

“As we move into 2024, we are focused on what is in our control. First, a continued focus on growing market share in the UK, France and Poland with delivery of our strategic growth initiatives. Second, driving productivity gains to offset wage inflation. And finally, delivering on our free cash flow and shareholder returns targets. We expect to see some product cost price inflation, albeit at a significantly lower level, and expect rational retail pricing and competitive price indices at all our banners.”

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