B&Q reports 6.4% fall in sales in 'tough' year
Home improvement chain B&Q posted a 6.4% drop in sales today after poor weather and more consumer caution led to a “tough” winter quarter.
B&Q’s owner Kingfisher said the UK and Ireland performance was offset by better trading at Screwfix, where sales rose 10.3% on a year ago due to new outlets and the roll-out of its “click, pay and collect” initiative.
Kingfisher chief executive Ian Cheshire admitted the final quarter of the year to February 2 mirrored a tough year as a whole, but that it was still in good shape with a bigger market share and a strong balance sheet.
Across the UK and Ireland, sales of £997m (€1.1bn) for the quarter were 5.8% lower on a like-for-like basis and including currency movements.
B&Q’s total sales of £842m (€966m) were down 6.4% on a total and underlying basis, reflecting the weak consumer backdrop in the UK and the “particularly challenging environment” for its nine stores in Ireland.
Heavy snowfall in January also impacted demand, while the need for promotional activity in December and a higher mix of trade sales meant margins came under pressure.
Despite the difficult conditions, the group’s cost cutting initiatives and push behind showroom products such as kitchens and bathrooms have kept it on track to meet profit expectations for the year.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “Kingfisher continues to wade through the economic treacle, as consumers in its core European markets remain under pressure.”
Group like-for-like sales were down 3.4% in the period, as sales from Castorama and Brico Depot in France fell 2.4% and its stores in countries including China and Russia improved 0.3%. Reported sales were 1.5% higher at £2.4bn (€2.75bn).
Mr Cheshire said: “We have had a tough fourth quarter, ending what has been a tough year impacted by unfavourable foreign exchange, particularly poor weather in the UK and weaker consumer confidence in our major markets.”
