Shares of B&Q owner Kingfisher sink as Q2 LFL sales reverse

24th Jul 2014 08:06

After a strong start to the year, DIY retailer Kingfisher's like-for-like (LFL) sales reversed into the red in the second quarter with trading "slower than anticipated".The stock had dropped by over 6% to 315.3p in early trading on Thursday.The largest home improvement retailer in Europe said that LFL sales slipped by 1.8% at constant currencies in the 10 weeks to July 12th. This followed an impressive 6.1% LFL increase in the first quarter, which was helped by favourable weather patterns compared with the previous year."Trading in our Q2 was always expected to be more difficult, annualising a very strong Q2 performance last year and following this year's weather-boosted Q1," said Chief Executive Sir Ian Cheshire. "However, our markets in Q2, notably in June, have been slower than anticipated particularly in France and Poland."Kingfisher said that LFL sales in France dropped 2.2%, owing to a weak home improvement sector and a slower house-building market with new housing starts and planning consents both down sharply over the country.The company is currently undergoing the acquisition of French DIY chain Mr Bricolage and a binding agreement has now been signed. It is now just waiting on anti-trust clearances.Meanwhile, in Poland, LFL sales were 3.5% lower, which the company blamed on weak outdoor and seasonal product sales, as well as strong comparatives with last year.In the UK, where Kingfisher trades as B&Q and Screwfix, LFL sales were down 1.3% with strong growth at Screwfix unable to offset weakness at B&Q.Cheshire said it is "unclear" how long this recent weakness will last, but the company will know by the time of its interim results in September following the "key summer months"."In the meantime we are accelerating our self-help margin and cost initiatives to help support our second half performance," he said.BC