Shares in Kingfisher (LON:KGF) have fallen into the red in today’s session as the company revealed that weak sales in France had pressured its third-quarter performance. The B&Q owner, however, reassured investors that it remains on track to deliver its full-year strategic milestones.
As of 10:27 GMT, Kingfisher’s share price had given up 1.35 percent to 300.30p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.20 percent higher at 7,404.46 points. The group’s shares have lost more than 18 percent of their value over the past year, and are down by some 14 percent in the year-to-date.
LFL sales drop
Kingfisher announce in a statement this morning that its like-for-like sales had dropped 0.5 percent in the third quarter of its financial year, reflecting weak performance in France, which delivered a 4.1-percent fall. In the UK and Ireland, sales, however, rose 1.5 percent, while the group’s ‘Other international’ segment delivered a 2.7-percent rise.
“Q3 has followed a similar course to the first half. We have seen strong growth at Screwfix and Poland offset by continued weak sales in France, alongside some business disruption from our ONE Kingfisher plan,” Kingfisher’s chief executive Véronique Laury commented in the statement, adding, however, that the company remained “comfortable with full year profit expectations”.
Analysts weigh in on results
City A.M. quoted Ken Odeluga, market analyst at City Index, as commenting that while “the group would have frayed more severely without the steadfast optimism of CEO Véronique Laury, her confidence has not smoothed the path towards ONE Kingfisher for the first two years, and year three is set to be just as tough”.
The analyst added that the group’s “UK/Ireland recovery will be tested further next year, leaving ample scope for sceptical investors to question Kingfisher’s viability as a single entity again”.