LONDON (Reuters) - Kingfisher (KGF.L), Europe’s second largest home improvement retailer, said its quarterly sales were hit by winter snow storms which kept British and French shoppers at home.
Shares in Kingfisher, which trades as B&Q and Screwfix in Britain and Castorama and Brico Depot in France, fell by as much as 3.5 percent on Thursday immediately following the results.
March’s Siberian blast, dubbed the “Beast from the East” in Britain, hit sales of weather-related categories and forced the temporary closure of 40 B&Q stores and 74 Screwfix outlets.
Kingfisher said total sales in the three months to April 30 fell 2.5 percent on a constant currency basis to 2.83 billion pounds ($3.78 billion), while like-for-like sales fell 4.0 percent, with 3.0 percent attributed to the poor weather.
“It was a challenging start to the year with exceptionally harsh weather across Europe and weak UK consumer demand,” said Chief Executive Véronique Laury.
“February and March were particularly affected with sales improving over the course of April and into May.”
Official data for March and updates from other British retailers also showed the impact of the weather.
Kingfisher, which across Europe trails France’s Groupe Adeo, is in the third of a five-year plan to boost annual profit by 500 million pounds from 2021, which Laury said was on track.
Costing 800 million pounds over five years this involves unifying product ranges across brands, boosting e-commerce and seeking efficiency savings.
B&Q’s like-for-like sales slumped 9 percent, while growth at the Screwfix chain slipped to 3.6 percent. Analysts had forecast a decline of about 8 percent and a rise of 5 percent respectively.
Meanwhile, like-for-like sales fell 8.0 percent at Castorama but were up 0.8 percent at Brico Depot.
Laury said market conditions continue to be mixed.
“The UK is uncertain, as demonstrated by recent weak retail sales data; France is encouraging, but volatile; whilst Poland continues to be supportive,” she said.
Shares in Kingfisher, down 18 percent over the last year prior to Thursday’s update, reversed early falls and were flat at 0850 GMT, valuing the business at 6.4 billion pounds.
“We expect Kingfisher to recover some but not all of the seasonal weakness and see consensus profit before tax downgrades (for 2018-19) in the order of 2-3 percent,” RBC Europe analyst Richard Chamberlain, said.
Last month Kingfisher’s UK rival Homebase/Bunnings, owned by Australia’s Wesfarmers (WES.AX), reported a 13.9 percent slump in same store sales in its latest quarter.
Analysts say Kingfisher would be a major beneficiary if Wesfarmers quits the UK after its disastrous 2016 purchase of Homebase. In February, Wesfarmers took a $1 billion writedown on Homebase and said it was reviewing its future. It will update the market on June 7.
Media reports have said Wesfarmers is prepared to pay a dowry to a new owner to rid itself of the business.
($1 = 0.7483 pounds)
Editing by Kate Holton and Alexander Smith