20th May 2021 09:07
(Alliance News) - DIY store chain operator Kingfisher PLC on Thursday raised its profit guidance as the Covid-19 pandemic-spurred demand for home-improvement projects continues.
Kingfisher said it delivered strong sales growth in the first quarter, with positive momentum continuing into the second quarter.
For the three months to April 30, Kingfisher reported total group sales of GBP3.45 billion, up 64% on a like-for-like basis, supported by strong demand in the UK and France as well as continued e-commerce sales progress.
In the UK & Ireland, where Kingfisher has B&Q and Screwfix stores, first-quarter sales were GBP1.83 billion, up 65% on a like-for-like basis. In France, where the company operates Castorama and Brico Depot, like-for-like sales were up 102% to GBP1.18 billion.
Sales growth was boosted by an increase in online activity, with e-commerce sales up 63% on the prior year period, now making up more than a fifth of total sales. Kingfisher has carried out tens of thousands of virtual showroom sessions since the start of 2021 as costumer shopping habits change.
Kingfisher said the second quarter has started well with like-for-like sales to May 15 up 8.2%, which continues to reflect strong demand. However, it did acknowledge the 'considerable strain' on its supply of goods due to the effects of the pandemic and the Suez Canal container ship blockage.
Following the upbeat performance, Kingfisher raised its first-half like-for-like sales growth view to mid-to-high teens from low double-digit. It also anticipates first-half adjusted pretax profit to be ahead of previous expectations, in the range of GBP580 to GBP600 million. Kingfisher posted adjusted pretax profit of GBP415 million in the first half of last year.
Kingfisher expects financial 2022 adjusted pretax profit growth ahead of sales, from previously 'in line with', as it maintained its original guidance for the second half of the year, which faces a strong annual comparable.
"We continue to see high levels of demand from both new and existing customers, with clear progress made on our 'Powered by Kingfisher' strategic priorities, especially in four key areas. Firstly, e-commerce continues to be our fastest-growing channel with two-year growth of over 250%, now accounting for 21% of group sales. During the quarter, we established a new agile operating model for our technology and digital teams, and further strengthened these teams with multiple new hires," said Chief Executive Officer Thierry Garnier.
"Secondly, we are excited to have launched Screwfix as a pure-play online retailer in France in late April. Thirdly, our new own exclusive brand kitchen range is now available in all key markets, with very positive results despite lockdown restrictions," Garnier added.
All stores are now open, Kingfisher stated, following temporary closures in France and Poland.
Kingfisher shares were up 0.2% on Thursday morning in London.
By Will Paige; [email protected]
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