Kingfisher Second Quarter Sales Falter At Constant Currency

The home improvement group said there was disruption from its restructuring

The company, which owns B&Q and Screwfix in Ireland and Britain and Castorama and Brico Depot in France, said that unseasonably good weather during the second quarter of previous year boosted trading and helped to put the most recent three-month period firmly in the shade.

Laury previously warned that the results of the European Union referendum had "created uncertainty for the United Kingdom economic outlook", but in today's results said she remained cautiously optimistic over Kingfisher's performance over the second half of the year.

Kingfisher, the parent company which owns B&Q and Screwfix, saw overall like-for-like sales decline 1.9 cent in the three months to July 31, while overall sales on a total basis rose four per cent to £3.1 billion.

Total sales for the United Kingdom and Ireland dipped 2.1 per cent, which the firm was down to a softer B&Q performance offset the bright performance of Screwfix, while total sales in France were down 3.3 per cent.

The FTSE 100 got off to a slow start this morning, while the big news of the day came from Kingfisher, the owner of B&Q.

George Salmon, analyst at Hargreaves Lansdown, said: "It's sometimes hard to get a grip on the underlying direction of travel at Kingfisher, so dependent is the group on the vagaries of the weather".

"The second half should be a good test, however, of the progress being made, once Kingfisher irons out its product availability problems, especially as France's economy seems to be finally showing some positive momentum", he added.

The global DIY group blamed the dip in sales at B&Q on "seasonal swings", essentially bad weather, in the first half of the year. French operation's sales continue to fall despite better economic sentiment.

The key disappointment was the group's French businesses, Castorama and Brico Depot, which collectively saw sales decline by 3.8%. These disruptions are set to affect the business into the second year of the restructuring plans, but will hopefully fade away. The retail environment will be increasingly tough to operate in due to price pressures, competition and the transition to online shopping.

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