- ‘Good start’ to year
- Market share gains in UK, France, Poland
- Cautious outlook leaves investors cold
Home improvement giant Kingfisher (KGF) delivered a welcome uptick in first-quarter sales driven by strong demand for seasonal categories at B&Q in particular.
Why then, did shares in the DIY-stores operator drop 2.1% to 290p in early dealings?
The answer appears to be the lack of a current trading update and the absence of a full-year profit upgrade, with management warning of ‘mixed’ consumer sentiment across Kingfisher’s markets.
BALMY WEATHER BOOSTS B&Q
Group sales grew 1.6% to £3.3 billion in the quarter ended 30 April 2025, with like-for-like sales up 1.8%, ahead of the 0.7% decline consensus was calling for.
Encouragingly, Kingfisher also highlighted a second quarter of underlying growth in ‘big-ticket sales’, supported by recent range reviews.
This quarterly ‘beat’ was driven by outperformance in the UK & Ireland, where like-for-like sales rose by a better-than-expected 5.9% as B&Q benefited from favourable weather.
B&Q’s like-for-like sales jumped 7.9%, driven by strong seasonal category sales, with a positive performance also seen in core and big-ticket categories.
Also driving the beat was France, where a 3.2% like-for-like sales decline proved better-than-feared and the company’s Castorama and Brico Depot chains both witnessed improved underlying sales trends.
Robust performances on both sides of the Channel positively offset a weaker showing in Poland, where like-for-like sales dipped 3.2% with geopolitical uncertainties weighing on the Polish consumer.
‘A GOOD START’, SAYS GARNIER
Kingfisher CEO Thierry Garnier said his charge had made ‘a good start to the year with underlying sales growth of 3.1%, market share gains in all key regions and further progress in our strategic priorities’.
In the UK, he highlighted the successful conversion of eight former Homebase stores, all of which will be operating under the B&Q banner by the end of May.
‘France delivered sequential improvement, outperforming challenging market conditions,’ said Garnier, ‘while Poland, as expected, experienced short-term volatility due to geopolitical factors.’
MIXED CONSUMER SENTIMENT
Kingfisher stressed it does not have any US sales or operations, sources most of its products in Europe from the same country in which those products are then sold and also sources 20% to 25% of its products from Asia.
As such, the FTSE 100 company expects ‘little direct impact from any potential changes in cross border tariffs’, yet remains ‘watchful’ of any broader impact on both inflation and market demand nonetheless.
Rather than upgrade its outlook, Kingfisher left its full-year pre-tax profit guidance of £480 million to £540 million unchanged and reiterated guidance for free cash flow in the £420 million to £480 million range.
‘It is still early in the year and consumer sentiment remains mixed across our markets,’ explained Garnier. ‘We are focused on executing our strategic growth priorities, maintaining discipline on margin and costs, and driving shareholder returns.’