LONDON (Reuters) - Home improvement group Kingfisher’s (KGF.L) sales surged as its European stores emerged from coronavirus lockdowns and the company said its business would be more resilient than most in the coming recession.
Shares in Kingfisher, which owns B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, were up 5.5% by 0817 GMT after it reported underlying sales up 21.8% in its second quarter so far to June 13.
The retailer has seen an improving relative sales trend, with like-for-like sales moving from being down 74% in the first week of April to more than 25% higher since the second week of May.
CEO Thierry Garnier told reporters people had been encouraged to take on do-it-yourself (DIY) projects because they were spending more time at home and had fewer leisure and travel options.
All of Kingfisher’s UK and French stores were closed for in-store purchases from March 23 and March 15 respectively, though click and collect and home delivery options were made available. It gradually re-opened stores in the second half of April. E-commerce sales have increased fourfold since mid-March.
To cope with demand it is recruiting 3,000-4,000 more staff.
Kingfisher said it could not provide specific guidance for the 2020-21 year given the uncertainty around the pandemic.
Garnier said an economic downturn would particularly hit demand for big projects such as kitchens and bathrooms. But he added: “I still think that DIY overall will prove more resilient than the average.”
The group has reduced costs, preserved cash and boosted liquidity to get it through the crisis. As at June 12, it had access to more than 3 billion pounds ($3.8 billion) of cash.
For its year to Jan. 31, Kingfisher reported a 5.2% fall in adjusted pretax profit to 544 million pounds on sales down 1.5% to 11.5 billion pounds.
Statutory pretax profit fell 65.7% to 103 million pounds after Kingfisher took 441 million pounds of exceptional items, largely reflecting impairments for its stores and Russia.
The group said in March it would not pay a final dividend.
Reporting by James Davey; editing by Kate Holton and Jane Merriman