20th Nov 2019 08:00
(Alliance News) - DIY retailer Kingfisher PLC warned on Wednesday the outlook remains gloomy following a "disappointing" third-quarter performance.
Sales for the three months to October fell 3.1% to GBP2.96 billion, with the like-for-like figure declining by 3.7%.
This, Kingfisher said, was due to continued disruption in bringing in new product ranges, lower promotional activity, weakness in France, as well as generally softer market conditions in the firm's core markets.
"It is clear there is much to do to improve our performance. Kingfisher's trading during the third quarter was disappointing. My early assessment is that we have not found the right balance between getting the benefits of group scale and staying close to local markets," said recently appointed Chief Executive Thierry Garnier.
"We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel. Altogether, this has brought disruption to sales and has distracted the business from focusing on customers. In addition, we faced softer market conditions in our main markets during the period," Garnier added.
In the UK, B&Q UK & Ireland delivered a 3.5% decline in revenue, with like-for-like down 3.4%. Screwfix increased revenue by 7.9%, and 3.7% like-for-like.
Kingfisher's French businesses, Castorama and Brico Depot, posted a 5.7% and 6.2% revenue decline respectively. Like-for-like, revenue was down 6.0% for Castorama and 6.1% for Brico Depot.
The firm's other significant international operation, Poland, posted a 1.4% revenue decline with the like-for-like figure falling by 3.2%.
Looking to the full-year, Kingfisher sees softness and range disruption continuing in the UK, while in France, Castorama is set to underperform the market and Brico Depot will suffer from lower promotional activity.
"As a team, our priority is to fix our operational issues - particularly in IT and supply chain in France - and refocus our efforts. This includes stopping or pausing a number of initiatives to concentrate on stabilising performance and trading. The effect of these changes will not be immediate," added CEO Garnier.
By George Collard; [email protected]
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