Hargreaves Lansdown argues that Kingfisher’s (LON:KGF) latest results show that DIY is on the wane and the group needs to deliver, Citywire reports. The comments came after the blue-chip group updated investors on it second-quarter performance yesterday, delivering a rise in overall sales, while disclosing weak performance in France.
Kingfisher’s share price tumbled in the previous session as investors digested the results, giving up 4.82 percent to 274.50p. The stock underperformed the broader UK market, with the benchmark FTSE 100 index closing into positive territory, having benefitted from a recovery in mining stocks. The DIY retailer’s shares have lost just under 11 percent of their value over the past year.
HL weighs in on Kingfisher’s results
Citywire quoted Hargreaves Lansdown analyst George Salmon as commenting yesterday that Kingfisher’s UK figures were “more a function of a scorching summer than any underlying progress”. The DIY retailer reported yesterday that its sales in the second quarter had advanced on the back of the warm weather spell across the UK, which helped offset a sales in drop in France.
“Strip out the impact of summer items like barbeques and garden furniture, and sales, which headed south over the winter, have continued to fall,” he pointed out. “That’s quashed any hopes that B&Q would benefit from the recent problems at Homebase.”
Salmon further noted that a fall in profitability in the first half of the year meant that the pressure was “on the group to deliver from here on”.
Other analysts on blue-chip group
Royal Bank of Canada continues to see Kingfisher as a ‘sector performer,’ valuing the shares at 330p. According to MarketBeat, the DIY retailer currently has a consensus ‘hold’ rating and an average price target of 340p.