Kingfisher focus on profits over sales welcomed

The DIY giant reported a like-for-like sales fall of 4.4% in the UK and Ireland, which largely comprises B&Q, in the 10 weeks to July 10. The decline was worse than expected, but the retailer said it was a result of a less promotional stance.

Kingfisher’s group like-for-likes slipped 0.8%, but at the French business they rose 2.6%. In the other countries in which Kingfisher operates, like-for-likes increased 0.8%

UBS analyst Andy Hughes said: “The current trading strategy of not chasing unprofitable sales seems sensible. There is some concern about slower UK DIY market growth but given this period, which included an election, it may be too early to draw this conclusion. We expect limited change to consensus pre-tax profit.”

Oriel Securities Ramona Tipnis said B&Q’s like-for-like decline was “disappointing” but that Kingfisher’s strategy of maintaining margins at the cost of sales had “worked”.

She said: “We see it as positive that the company is prepared to step away from a promotional stance at this period.”

Kingfisher group chief executive Ian Cheshire said: “This is a solid performance in an uncertain environment. Consumer spending remains under pressure and so we continued to focus on targeting our promotions to drive profitable sales.While we remain cautious, our well established self-help initiatives leave us well placed.”