LONDON -- Kingfisher (KGF 1.06%), the home improvement retailer with brands such as B&Q and Screwfix among its 1,030 stores in eight countries around Europe and Asia, released a trading update today which saw like-for-like sales down 4.2% to £2.6 billion and constant-currency profit fall 29% to £114 million.
The sales were affected by weak consumer confidence in France and the U.K., as well as the particularly cold weather in March and early April. Kingfisher France like-for-like sales declined by 5.6% to £1.1 billion although two new stores were added, tempering the overall decrease in sales to 3.8%.
Gross margin was up 10 basis points, however, with strong cost controls leading to profit of £66 million, down 15% from the previous year. Total like-for-like sales in the U.K. fell by 4.7% with mostly flat margins. Reported retail profits fell 32% to £50 million.
Group chief executive Ian Cheshire said:
Market conditions have remained challenging in the first quarter compounded by the effects of an early Easter and unseasonably cold weather across Europe. As a result, general footfall was down and demand for outdoor maintenance, gardening and leisure products was adversely affected for a second year running. These impacts were particularly acute in March which resulted in that month accounting for the vast majority of the quarter's profit decline. However, our performance toward the end of the quarter was encouraging following a return to more normal weather patterns.
Kingfisher will be hoping the summer season shines brightly in all senses to amend for the disappointment of the first quarter. Despite some volatile trading this morning, Kingfisher's share price has risen 3.4% as of 8:40 a.m. EDT. Investors will be watching further updates closely in the hope of building on recent growth.
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