July 22 (Bloomberg) -- Kingfisher Plc, Europe’s largest home-improvement retailer, said second-quarter sales declined as the U.K. B&Q chain offered fewer promotions and Britons cut spending on large items such as bathrooms and kitchens.
Revenue at stores open at least a year fell 0.8 percent, excluding currency swings, in the 10 weeks ended July 10, the London-based company said today in a statement. The decline was led by the U.K., where same-store sales dropped 4.4 percent.
Consumer spending “remains under pressure, notably in the U.K.,” Chief Executive Officer Ian Cheshire said in the statement. British mortgage approvals fell in June as tighter lending conditions and weaker confidence curbed housing demand, according to preliminary Bank of England data.
“The U.K. is disappointing,” Nick Bubb, an analyst at Arden Partners, said by e-mail “We had hoped to see a small positive” on sales growth. Bubb rates the shares “add.”
Kingfisher fell as much as 3.8 percent in London trading and was down 6 pence, or 2.7 percent, to 217.5 pence as of 8:18 a.m. The shares have declined about 5 percent this year, compared with the 18 percent drop of U.K. competitor Home Retail Group Plc, owner of the Homebase chain.
Same-store sales in France, where Kingfisher owns the Castorama and Brico Depot chains, climbed 2.6 percent. “The news is good on France, with sales up helped by a welcome swing at the trade-oriented Brico Depot,” Arden’s Bubb said.
The drop in overall same-store sales follows a 1.8 percent decline in the previous quarter.
“We continued to focus on carefully targeting our promotions,” Cheshire said. “Our expectations for first half cash and profit outturn remain on track.”
Same-store sales in Poland fell 4.2 percent in a “weak market,” the retailer said.
In China, same-store revenue climbed 8.1 percent. Losses in the country are being “reduced significantly” as the housing market improves and the retailer offers services to renovate an entire room. Staff who were previously funded by suppliers are being replaced with B&Q-trained employees, Kingfisher said.
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