Kingfisher has experienced a slowdown in sales in the three months to 31st October when compared to the same period last year.
Group LFL sales were 6.3% weaker on a reported basis and 2.4% down on a constant currency basis.
The drop in sales from a year ago shows the jump in DIY activity was starting to wane but sales this year were still 15% higher than two years ago, before the pandemic.
“Lockdown winners were always going to face tough year-on-year comparatives in 2021 and no more so than Kingfisher. The DIY boom that kicked off in 2020 has had considerable legs and still shows positive momentum. Unfortunately, it’s very hard to grow by a very large amount two years in a row, and so Kingfisher is now lamenting a drop in third quarter like-for-like sales,” said AJ Bell investment director Russ Mould.
“Most companies are comparing their latest takings to those of two years earlier, to see progress from a pre-Covid world to now. On that basis, Kingfisher is still doing very well. Furthermore, the company’s fourth quarter has got off to a bang and it is guiding for full year profit to be at the higher end of previously guide ranges.”
Despite the drop in sales compared to a year ago, CEO Thierry Garnier was confident long term changes in consumer behaviour would support demand.
“Kingfisher has delivered another successful quarter, with 2-year LFL sales growth of 15% and strong growth across both retail and trade channels, and across all categories. These are even stronger sales trends given the backdrop of an increasingly ‘normalised’ consumerspending environment. Demand remains supported by what we believe are enduring new industry trends, including more working from home,” said Thierry Garnier, Chief Executive Officer.
“We continue to grow our market share, driven by strong execution of our new strategy. We are pushing forward with investments in key areas of the business to drive long-term growth, including further enhancements to our e-commerce proposition and Screwfix’s launch inFrance. And we are progressing with our clear plans to deliver on our carbon reduction targets, aligned to 1.5°C to 2025, and to become ‘forest positive’ by the same year.
“Since the start of this year we have maintained, and in many cases improved, our product availability, which is amongst the best in our industry. This has supported our market share gains and allowed us to upweight promotional initiatives in the quarter. We have also continued to manage inflation pressures effectively, while retaining highly competitive pricing.