Kingfisher Third-Quarter U.K. Sales Drop Amid Housing Slowdown
Kingfisher Plc, Europe’s largest home-improvement retailer, said sales at the U.K. B&Q chain fell in the third quarter amid a decline in housing-related spending.
Revenue at B&Q stores open at least a year dropped 4.2 percent from the same period a year earlier, when discounts to clear inventory boosted sales, the London-based company said today in a statement. So-called total retail profit, which excludes one-time costs, interest and taxes, rose to 240 million pounds ($375 million).
B&Q, the U.K.’s largest home-improvement chain, is dependent on the housing market, where a recovery is faltering as the government plans for the biggest spending squeeze since World War II. U.K. mortgage approvals fell to an eight-month low in October, a sign that the market slowdown is intensifying.
“Sentiment is likely to remain depressed by the outlook for big-ticket expenditure and housing transactions, particularly in the U.K.,” Simon Irwin, an analyst at Liberum Capital, said before the release. He rates Kingfisher “hold.”
Kingfisher rose 2.8 pence, or 1.2 percent, to 237.8 pence in London trading yesterday. The shares have climbed 3.8 percent this year, compared with the 29 percent decline of Home Retail Group Plc, the owner of B&Q’s main U.K. competitor Homebase.
Kingfisher, which also owns France’s Castorama chain, is assessing its next phase of growth including expansion into India and Brazil and enhanced online and mobile offerings to drive future earnings as consumer sentiment slumps.
Kingfisher’s third quarter covered the 13 weeks to Oct. 30. The retailer said it expects its loss-making China division to be profitable in the fourth quarter.
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