Kingfisher's U.K. Recovery Dimmed by Stagnant French Salesby
Kingfisher Plc, Europe’s largest home-improvement retailer, reported third-quarter earnings that missed estimates as stagnant sales in France partially offset stronger growth in the U.K.
So-called retail profit declined 6.6 percent to 223 million pounds ($338 million), London-based Kingfisher said in a statement Tuesday, missing the median estimate of 16 analysts for 234 million pounds. Same-store revenue at the Castorama do-it-yourself chain in France fell 0.2 percent, the decline driven by a nationwide slowdown in August.
“In French DIY, August is a really important month because people take holiday and tend to work on home improvement projects," Charles Allen, an analyst with Bloomberg Intelligence, said by phone. “Castorama won’t make those sales back because people don’t have the time during the rest of the year."
French DIY retail sales fell 3 percent in August, according to data from Banque de France, amid unusually wet weather. That added to challenges facing Kingfisher Chief Executive Officer Veronique Laury, who almost a year into her tenure is still laying the foundations of a long-term strategy. Investors will have to wait until early 2016 to learn more.
Kingfisher shares fell 2.4 percent to 337 pence at 8:17 a.m. in London.
In contrast to conditions in France, Kingfisher is benefiting from a stronger U.K. economy. Same-store sales at the B&Q chain rose 2.4 percent, surpassing estimates for a 1.5 percent rise. Screwfix, a chain primarily serving tradesmen, increased same-store sales by 13 percent.