Kingfisher issued a surprisingly strong half-year report on Tuesday, sparking a rally in the stock as investors cheered positive revenue growth across the UK and Europe.
Investors would have been forgiven for expecting a soggy update from Kigfisher, given the disappointing UK economic backdrop.
However, Kingfisher wowed the market as it increased its profit guidance to the upper end of the previously guided range of approximately £480m to £540m.
“There was plenty to like about the numbers, which makes a nice change for shareholders,” said Chris Beauchamp, Chief Market Analyst at IG.
“The investment case for Kingfisher has been given a solid boost, thanks to improvements in margins, cash flow and an upgrade to forecasts. Combined with the recent improvement in Wickes’ trading, it seems things are finally looking up for this area of UK retail.”
The DIY retailer posted underlying like-for-like sales growth of 1.9% in the third quarter, up from 1.4% in Q2. Both B&Q and Screwfix delivered robust results, with like-for-like sales rising 4.4% and 3.0% respectively.
The company gained market share across the UK, France and Spain whilst maintaining its position in Poland. Trade sales surged 11.9% and e-commerce grew 11.1%, reflecting continued strategic progress.
“We delivered a strong first half with high quality underlying like-for-like sales growth of 1.9%, driven by increased volumes and transactions,” said Thierry Garnier, Chief Executive Officer.
“Our teams continue to execute at a high level, delivering double-digit growth in our strategic initiatives, trade and e-commerce, which supported our market share gains. We were encouraged by underlying quarter-on-quarter growth in our core categories, and a third consecutive quarter of growth in big ticket sales.”