Kingfisher plc (LON: KGF) have seen their shares sink on Wednesday as the firm updated shareholders with a set of disappointing results.
Kingfisher are a DIY retailer that have operations across the world, but have boasted strong trading figures in Europe in recent years.
Shares in Kingfisher sunk 5.7% to 196p. 20/11/19 10:26BST.
The poor set of results follow a disappointing interim update in September, where the firm saw its half year profits fall significantly.
The FTSE100 (INDEXFTSE: UKX) listed firm said trading in the three months to October was “disappointing”, with sales falling 3.7% to £2.96 billion.
Like-for-like revenue slipped 3.7%. Kingfisher said this “reflects continuing disruption from new range implementations, lower promotional activity and ongoing operational challenges in France, and softer market conditions in our main markets”.
“My early assessment is that we have not found the right balance between getting the benefits of group scale and staying close to local markets. We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel,” said chief executive Thierry Garnier, who was brought in to turn the company’s fortunes around.
“I am proud to be leading a group with strong assets, excellent market positions, differentiated business models and strong brands,” he said.
B&Q sales sank 3.5% year on year to £820 million, slightly offset by an eight per cent rise in Screwfix sales to £477 million.
Richard Hunter, head of markets at Interactive Investor, said Garnier “could be forgiven for thinking that he has been handed a poisoned chalice”.
He added that Kingfisher’s transformation plan has not been effective and the firm’s vast complexity leaves it vulnerable to nimbler competitors, leading to plunging sales.
“Unfortunately the near-term outlook from the company is equally bleak and the new CEO will have the combined challenges of both assimilating Kingfisher’s culture for himself as well as making the necessary improvements to the company’s fortunes.
“This further decline brings Kingfisher’s status as a FTSE 100 constituent into question and without some improvement in the lead up to the December reshuffle, the company is a strong contender for relegation,” he said.
Kingfisher are one of many firms who have seen slips in the DIY and homebuilding industry, established names such as Barratt Developments (LON: BDEV) have seen slow sales in their most recent update.
Additionally, Galliford Try (LON: GFRD) and Bovis Homes (LON: BVS) agreed a merger deal in order to combat the slump in demand and slow trading period.