Feb. 21 (Bloomberg) -- Kingfisher Plc, Europe’s largest home-improvement chain, said adjusted annual profit will match analysts’ expectations after reporting a sales decline in France, its biggest market, that eased in the fourth quarter.
Sales at French stores open at least a year fell 2.4 percent in the 14 weeks ended Feb. 2, the London-based retailer said in a statement today. That was less than the median estimate of ten analysts of a 4 percent decline. Sales in the U.K. and Ireland declined 5.8 percent on the same basis, missing the median estimate of a 4.5 percent decline, and compares with a 3.8 percent fall in the previous quarter.
Analysts expect annual adjusted pretax profit of 715 million pounds ($1.08 billion), the retailer said. Kingfisher, which owns the B&Q chain in the U.K. and Castorama outlets across Europe, is sourcing more products directly from manufacturers and buying common items for all its overseas outlets to reduce costs and maintain profits even as DIY spending falls.
“In line with consensus, profits should be seen as a positive,” Warwick Okines, an analyst at Deutsche Bank, said in a report. He has a hold recommendation on the stock. The fourth-quarter figures offer “relief but uncertainty remains.”
The shares fell 0.65 percent percent to 276.5 pence by 8:45 a.m. in London trading. The stock has fallen 2.8 percent in the year to date.
“We have had a tough fourth quarter, ending what has been a tough year impacted by unfavourable foreign exchange, particularly poor weather in the U.K. and weaker consumer confidence in our major markets,” Chief Executive Officer Ian Cheshire said in a statement.
Kingfisher said profitability fell in its two largest markets, France and the U.K., as it sold less and offered more promotions to lure shoppers.
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