Kingfisher has reported a slight increase in profits despite a decline in overall sales.
- B&Q’s big ticket item sales decreased by 11.6% during the reporting period.
- Group sales saw a minor decline of 1.8%, yet pre-tax profit rose by 2.3% to £324m.
- Overall sales in the UK and Ireland showed resilience, supported by strong ecommerce growth.
- The company remains focused on cost management and market share expansion.
Despite a challenging economic environment, Kingfisher’s pre-tax profits edged up by 2.3%, reaching £324 million in the six months leading to 31 July 2024. This was achieved even as overall group sales experienced a 1.8% reduction. A significant factor in this outcome was the decline in sales of big ticket items at B&Q, which saw an 11.6% drop over the specified period.
In the UK, like-for-like sales exhibited slight resilience by dipping just 0.2%, attributed to robust ecommerce performance and TradePoint sales, both of which grew by 7.1%. These segments now compose 22% of B&Q’s total sales, with marketplace transactions forming 40% of online sales during this timeframe. This underscores B&Q’s strategic pivot towards digital platforms to buffer against declining in-store sales of high-value items.
The French division of Kingfisher, however, was not as fortunate, experiencing a more pronounced setback with a 7.2% drop in like-for-like sales. This contrasts the more stable UK results, signifying varying market responses across different regions. The group’s leadership, under Chief Executive Thierry Garnier, credits effective cost management and inventory control in navigating these mixed results.
Seasonal sales, which were initially impacted by weather conditions, have shown recovery since early July according to company statements. However, big ticket sales remain under pressure with a 6.8% fall in like-for-likes over the half-year. Despite these challenges, Kingfisher asserts that it has successfully gained market share within the UK, reflecting a strategic focus on strengthening its market position.
Chief Executive Thierry Garnier remarked, ‘Trading overall in the first half was in line with our expectations. This was underpinned by customers continuing to repair, maintain and renovate their existing homes, driving resilient volume trends in our core product categories’. His comments encapsulate the group’s adaptability and ongoing commitment to its strategic initiatives targeting core home improvement segments.
Kingfisher’s strategic implementation and cost management have positioned it for potential growth despite current market challenges.
