Kingfisher Second-Quarter Sales Rise on Increased Discounts
Kingfisher Plc (KGF), Europe’s largest home-improvement retailer, said second-quarter revenue rose at its B&Q chain as increased discounts on indoor products lured enough shoppers to offset soggy weather in June and July.
Sales at U.K. and Ireland B&Q stores open at least a year increased 1.6 percent in the 10 weeks ended July 7, the London- based company said today in a statement, improving upon the 12 percent dip of the previous quarter. The average estimate of seven analysts compiled by Bloomberg was for a decline of 0.2 percent. B&Q’s total sales rose 4.9 percent.
Kingfisher gets more than 40 percent of revenue from the U.K. and Ireland, where record rainfall has kept gardeners indoors. After the wettest June on record, England has already had 150 percent of the normal amount of rain it usually gets in July, the Met Office has said.
“Additional marketing and promotional activity helped encourage customers to switch some of their activity to internal repairs and projects, partially offsetting the weather-related weakness, particularly in the U.K.,” Chief Executive Officer Ian Cheshire said in the statement.
Gross margins at B&Q should narrow this quarter, hurt by markdowns and sales promotions to attract shoppers, the company said.
The retailer is seeking growth in countries including Poland and Russia to help offset declines in Britain. Sales in Poland rose 1.5 percent and revenue increased 49 percent in Russia. In France, where Kingfisher owns the Castorama chain, sales declined 0.6 percent. Across all of Kingfisher’s banners, sales dropped 0.4 percent at stores open at least a year.
Kingfisher shares rose 1.6 percent to 275.2 pence in London trading yesterday.
To contact the reporter on this story: Matthew Boyle in London at email@example.com
To contact the editor responsible for this story: Celeste Perri at firstname.lastname@example.org