24th Nov 2022 11:27
(Alliance News) - As household bills mount during the cost-of-living crisis, the desire from consumers to make energy savings in their homes has been a resilient force for DIY retailer Kingfisher PLC.
On Thursday, the B&Q owner said it saw continued gains in market share during the third quarter and noted a "good start" to the fourth quarter.
The London-based company said sales in the three months ending October 31 were up 0.6% year-on-year to GBP3.26 billion, with like-for-like sales 15% ahead of their pre-pandemic level in the quarter.
Chief Executive Thierry Garnier explained that whilst the market backdrop remained challenging for the firm, its DIY sales continue to be supported by new industry trends such as more working from home and a "clear step-up" in customer investment in energy saving and efficiency.
"DIY habits are continuing although we appear to be switching from 'changing rooms' style makeovers to stopping draughts and insulating lofts," noted Derren Nathan at Hargreaves Lansdown.
In response to this, Kingfisher said that it has launched energy-saving tools in the UK and France to help customers access products and services to increase the efficiency of their homes ahead of winter.
"We have seen a very positive take-up of these services so far, with B&Q, for example, taking nearly 1,000 appointment bookings within the first three days of launch," Garnier said.
For AJ Bell's Russ Mould, the need to ensure homes are energy efficient and to save on heating bills for consumers was a key driver of the business, which he suggested could persist "over the medium term."
"It seems the work-from-home trend is continuing to drive some business and, despite pressure on household budgets, wider home improvements and the do-it-for-me market remain robust," Mould said.
In the three weeks to November 19, Kingfisher reported that like-for-like sales were up 2.8% year-on-year, and up 16% on a three-year basis.
Despite the robust trading, Kingfisher announced it lowered its annual adjusted pretax profit guidance.
The firm now expects adjusted pretax profit between GBP730 million to GBP760 million, down from a previous estimate of around GBP770 million.
Traders were disappointed by the lowered guidance, with shares in Kingfisher falling 1.5% to 249.90 pence on Thursday morning in London. In the year-to-date, the stock was down nearly 24%.
interactive investor's Victoria Scholar said that Kingfisher had been caught up in a "broader market sell-off this year" but noted that its shares have rebounded by "more than 20% over the last month" thanks to a more positive broader market sentiment.
"Kingfisher continues to grab market share and while it remains buffeted by higher energy costs and increased wages, it has laid the foundations to get through the current consumer downturn," AJ Bell's Russ Mould concluded.
By Heather Rydings; [email protected]
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