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Kingfisher France reports flat LFL sales during Q3

Kingfisher has published a third quarter trading update covering the thirteen weeks ending 2nd November 2013.

Kingfisher France:
Kingfisher France total sales grew by 1.9% (flat LFL) to £1,173 million in soft markets impacted by weak consumer confidence. Across the two businesses, one net new store was opened and two were revamped, adding around 3% new space.

Gross margins were down 10 basis points, with on-going self-help initiatives offset by higher price promotional activity across both businesses. Despite continued focus on cost control, overall costs were higher year on year resulting in retail profit of £140 million, down 5.6% year on year.

Castorama:
Castorama total sales grew by 4.2% (+2.3% LFL) to £655 million. According to Banque de France data, sales from the home improvement market (1) were up 0.2% in the quarter (Q3 2012/13: down 2.5%). Castorama benefited from its innovative ‘Do-it-Smart’ approach aimed at making home improvement projects easier for customers. Sales of indoor and outdoor seasonal products were up around 2% with sales of new indoor paint and storage ranges performing particularly well.

Brico Dépôt total sales declined by 0.9% (-2.6% LFL) to £518 million. In an on-going weak trade market Brico Dépôt benefited from new ranges introduced last year (e.g. kitchen and indoor lighting ranges) and more ‘arrivages’ (rolling programme of one-off special buys).

Other International total sales increased by 11.6% (+2.9% LFL) to £653 million driven by the inclusion of the acquisition in Romania, LFL growth in Russia and China and new store openings. Retail profit increased 13.6% to £68 million driven by Poland and a higher contribution from Hornbach. During Q3, one net new store was opened in Spain.

Including the acquisition of stores in Romania in H1, around 15% net new space was added compared to Q3 last year.

Sales in Poland were up 2.0% (-0.1% LFL) to £306 million reflecting new store openings. Gross margins were up 110 basis points benefiting from self-help initiatives. Productivity initiatives more than offset cost inflation resulting in an 18.2% increase in retail profit to £42 million.

In Russia sales were up 4.2% (+4.2% LFL) to £128 million in a slowing consumer environment. Retail profit was £9 million (2012/13: £9 million reported retail profit).

In Turkey Kingfisher’s 50% JV, Koçtas, grew sales by 9.6% (+6.5% LFL) to £88 million benefiting from new store openings. Retail profit contribution was up 11.6% to £4 million.

Brico Dépôt Spain grew sales by 14.9% (-1.4% LFL) to £72 million reflecting new store openings offset by a challenging market. Retail profit was breakeven (2012/13: £1 million reported retail profit). Hornbach, in which Kingfisher has a 21% economic interest, contributed £16 million to retail profit, up 12.2% compared to Q3 last year reflecting better weather conditions in their Q2 (1). Bricostore Romania, in its first full quarter of trading since acquisition, contributed sales of £35 million and retail profit of £1 million.

B&Q China sales grew by 12.5% (+13.2% LFL) to £112 million driven by additional promotional activity and an improving domestic property market (2). Retail loss was £4 million (2012/13: £3 million reported retail loss) including £1 million relating to the new format store trial which opened in March this year. Industrial action in some of our Decoration Centres disrupted our trading during the key October ‘Golden Week’ holidays impacting sales in Q3 and into Q4.

For the full results publication please visit our Industry Articles pages: http://www.insightdiy.co.uk/articles.asp

Source : Kingfisher
www.kingfisher.co.uk

28 November 2013
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