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Kingfisher France Sees Like-For-Like Growth Of 9.3%

Castorama 725 x 500

Kingfisher has published full-year results for the year ended 31st January 2022, advising of a record year for profits and revenue. 

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France

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Kingfisher France sales increased by 9.0% (LFL +9.3%) to £4,498m, with 2-year LFL sales up 14.8%, reflecting strong demand in outdoor, kitchens and building & joinery categories. COVID-related restrictions in France led to some temporary store and non-essential range closures throughout the first quarter (and part of the second quarter), impacting total FY 21/22 LFL sales by c.-1%. These trading restrictions mostly impacted Castorama’s larger stores, but contributed to Brico Dépôt’s relative outperformance in H1 21/22 (Brico Dépôt’s store estate consists of mainly medium-sized stores, which were not required to close). LFL sales growth also benefited from our decision to gradually open more stores on Sundays since Q3 20/21, to satisfy higher demand.

Our banners continue to improve their competitive position in the French home improvement market. In FY 21/22, Kingfisher France outperformed the market on a 2-year LFL sales basis (based on Banque de France data), excluding the impacts on trading from COVID-related restrictions in H1 21/22.

Gross margin % increased by 60 basis points, largely reflecting reductions in logistics and inventory holding costs, higher OEB weighting at Brico Dépôt, and our effective management of inflation. This was partially offset by an upweighting of special promotions (arrivages), more trading events, and category mix.

Retail profit increased by 28.0% to £221m, reflecting strong growth in gross profit, partially offset by an increase in operating costs of 8.5%. Operating costs increased due to strong trading and additional Sunday openings, leading to higher staff costs (headcount and staff incentives) and store-related costs (increased security and marshalling). The prior year benefitted from COVID-related temporary cost reduction measures (e.g., advertising and marketing) and furlough relief related to temporary store closures. The increase in operating costs was partially offset by cost reductions achieved as part of our strategic cost reduction programme, as well as the annualisation of cost benefits from the permanent closure of eight Castorama stores in FY 20/21. Retail profit margin % improved 70 basis points to 4.9%.

Castorama total sales increased by 5.9% (LFL +7.2%) to £2,296m, with 2-year LFL sales up 13.9% reflecting resilient demand against the backdrop of strong comparatives. LFL sales of weather-related categories increased by 12% (increase of 25% on a 2-year LFL basis), while LFL sales of non-weather related categories, including showroom, increased by 6% (increase of 12% on a 2-year LFL basis).

The annualisation of a reduction in space following the permanent closure of eight Castorama stores in FY 20/21 impacted total sales by c.-1%. LFL sales growth was also supported by our decision to open more stores on Sundays. COVID-related restrictions in France led to some temporary store and nonessential range closures throughout the first quarter (and part of the second quarter), impacting FY 21/22 27 LFL sales by c.-1%.

Castorama’s e-commerce sales increased by 46% in FY 21/22 (up 318% on a 2- year basis), representing c.6% of total sales (FY 20/21: 5%; FY 19/20: 2%). 

Brico Dépôt total sales increased by 12.5% (LFL +11.6%) to £2,202m, with 2-year LFL sales up 15.9%. This reflects a continued focus on Brico Dépôt’s discounter credentials and differentiated ranges, with outdoor, building & joinery, kitchen and EPHC (electricity, plumbing, heating and cooling) all achieving double-digit LFL growth, YoY. The upweighting of special promotions (arrivages) contributed to increased customer engagement and improved price perception.

In H1 21/22 Brico Dépôt’s performance benefitted from being able to keep most of its stores open during the period (except for four stores that were only open to trade customers and for C&C). LFL sales growth was also supported by our decision to open more stores on Sundays. Brico Dépôt’s e-commerce sales increased by 8% in FY 21/22 (up 192% on a 2-year basis), representing c.5% of total sales (FY 20/21: 5%; FY 19/20: 2%). Brico Dépôt successfully opened two new ‘medium-box’ stores in FY 21/22 (both conversions of former Castorama stores).
 

Source : Kingfisher

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22 March 2022

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Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.

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