Kingfisher Plc (LON:KGF), today announced Q2 trading update to 31 July 2018.
· Q2 Group LFL up 1.6% helped by improved performance of weather-related categories which contributed c.+2% to Group LFL; H1 LFL -1.1% (Q1 LFL -4.0%)
· Good Q2 sales recovery at B&Q and Screwfix versus Q1 within the context of a continuing weak UK consumer backdrop
· Sales and gross margin of unified and unique ranges continued to grow
· H1 Group gross margin after clearance costs expected to be c.-40bps with Q2 ahead of Q1
· Actions in place to improve H2 Group gross margin and therefore still expect to grow the full year Group gross margin after clearance costs
· France performance in H1 reflects:
o Weaker footfall and impact of transformation-related activity at Castorama
o Continued sales growth at Brico Dépôt benefitting from new unified ranges
o Higher costs (c.+3.5% in constant currency) including phasing of marketing investment in Brico Dépôt
· £90m returned (30m shares) year to date via share buyback. Now returned £550m of c.£600m capital return commitment (4)
Kingfisher, Véronique Laury, Chief Executive Officer, said:
“We started our transformation two and a half years ago and are on track to deliver our strategic milestones for the third year in a row.
“In Q2, I’m pleased that we grew our sales after the exceptionally harsh weather conditions in Q1. In B&Q, Screwfix and Brico Dépôt France we delivered good sales growth. However, the performance of Castorama France has been more difficult and as a result we have put additional actions in place to support our full year performance in France with the benefits expected to come through in H2.
“We look forward to providing a more detailed update at our H1 results in September.”