DIY retailer Kingfisher cuts profit outlook again on weak French market
By James Davey
LONDON (Reuters) -European home improvement retailer Kingfisher on Wednesday downgraded its full-year profit outlook for the second time in three months, blaming a weaker-than-expected market in France.
Shares in the group, which owns B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, were down 5.7% in early trading, extending 2023 losses to 8%.
Kingfisher said its UK and Ireland business was showing resilience and winning market share.
However, it said its performance in France was impacted by a weak retail market, as well as an unusually warm autumn which delayed the start of insulation, plumbing and heating sales, to which Brico Depot is more heavily weighted.
Kingfisher said group like-for-like sales fell 3.9% in the three months to Oct. 31, its fiscal third quarter, and were down 3.4% in the first three weeks of its fourth quarter.
Third quarter like-for-like sales in the UK and Ireland division rose 1.1%, but in France they fell 8.6%.
Kingfisher noted the French home improvement market deteriorated far more than expected in September, with Banque de France sales data down 9.1%.
The retailer said that although the French market and trading trends improved in October and so far in November compared to September, it is assuming the market will remain at least as weak as October throughout the fourth quarter.
Third quarter like-for-like sales in Poland fell 9%, an improvement in the trend since the first half.
Kingfisher said it now expected an adjusted pretax profit of around 560 million pounds ($698 million) for the 12 months to the end of January 2024, down from the 590 million pounds it was forecasting in September and the 758 million pounds made in 2022/23.
The group also cut its forecast for full year free cash flow to 470 million pounds from previous guidance of over 500 million pounds.
Looking to 2024, CEO Thierry Garnier said: “We expect to see some product cost price inflation, albeit at a significantly lower level.”
Separately on Wednesday, debt-laden supermarket retailer Casino warned of likely losses for its core French business in 2023, due to a slower-than-expected turnaround at its hypermarkets business and the impact of investment costs.
($1 = 0.8025 pounds)
(Reporting by James Davey; editing by Sarah Young and Miral Fahmy)