It’s sometimes better to travel to arrive when investing in equities, and that has proved to be the case for Kingfisher shares after a strong start to the year.
Kingfisher shares had rallied going into the release of today’s Q1 trading update after peers reported strong results amid better weather conditions in the UK. Kingfisher produced similarly strong results with UK & Ireland reported sales rising 6.1%, helping to offset a 4.9% decline in France.
“Although the deteriorating performance in France wasn’t quite as bad as expected, revenues from its operations in Poland were much weaker than forecast, with both markets showing sales decline of 3.2%,” explained Susannah Streeter, head of money and markets, Hargreaves Lansdown
Kingfisher group Q1 sales came in at £3.3 billion, rising 2.2% at constant currency, despite a negative 0.9% calendar impact. This represented underlying total sales growth of 3.1%. Like-for-like sales increased 1.8%, with underlying growth of 2.7%.
Volume and transaction growth were driven by seasonal categories, which had a positive mix impact on average selling prices. Retail price inflation remained flat during the period.
“It seems Britons’ first impulse on seeing the sun is to start doing some DIY, if Kingfisher’s results are any indication,” said Chris Beauchamp, Chief Market Analyst at IG.
“A set of poor numbers in France was offset by UK consumers spending their unexpected early summer in Kingfisher’s stores, helping to lift like-for-like sales by 1.8%. Up 16% so far this year, the shares have been a haven from tariff volatility, though the update didn’t offer much to extend the rally in the short term.”
As alluded to by Beauchamp, Kingfisher shares dropped over 2% as the group reaffirmed guidance and offered investors little to be excited about other than better weather in the UK.