Shares in Kingfisher (LON:KGF) have fallen deep into the red in London this morning, as the DIY retailer posted a drop in sales for the third quarter of its financial year, pressured by continued poor performance in France. The company further unveiled plans to exit some of its markets in favour of markets where it has or could reach a leading position.
As of 08:25 GMT, Kingfisher’s share price had given up 4.83 percent to 234.40p. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.77 percent higher at 7,001.20 points.
Kingfisher posts Q3 results
Kingfisher announced in a statement this morning that its total like-for-like sales had dropped 1.3 percent to £3.05 in the quarter ended October 31, dragged by a 3.4-percent drop in France. In the UK and Ireland, LFL sales came in 0.7 percent lower.
“Transformation on this scale is tough, and we are operating in a difficult retail environment. We face challenges and we are addressing them,” the group’s chief executive Véronique Laury commented in the statement, adding that the group had taken the decision to exit Russia, Spain and Portugal as it looks to apply its “strategy with more focus and efficiency in our main markets where we have, or can reach, a market leading position”.
The update comes after it recently emerged that the group was seeking to sell six B&Q stores as it looks to raise cash to fund its ongoing turnaround plan.
Analysts weigh in on update
“Whilst there are some glimmers of hope for Kingfisher’s fortunes, the company remains in a difficult place and the update is confirmation of a long road ahead,” said Richard Hunter at Interactive Investor commented, as quoted by Proactive Investors.