Kingfisher PLC (LON:KGF) shares fell on Wednesday as the DIY stores chain's sales only inched higher in the first quarter, as growth from its UK chains B&Q and Screwfix was chiselled away by continued troubles in France.
The DIY retailer, which is hosting an “innovation day” on Wednesday to demonstrate new products, services and a convenience-store format to investors and analysts, reported group sales of £2.84bn for the three months to 30 April. This was up only 0.3% or 0.8% on a like-for-like (LFL) basis versus what was a weak start last year.
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Sales in the UK and Republic of Ireland were up 5% to £1.3bn, or 3.4% LFL, with B&Q back in positive territory and Screwfix remaining strong.
France remained the sick man, with sales down 3.4% to £1bn, or 3.7% lower LFL, with Castorama’s decline continuing 2.4% as transformation-related activity offset what was said to be a “positive start to the year”.
Brico Dépôt, which had grown sales last year, started on the back foot, with a LFLs slide of 5.1% mostly blamed on the chain getting rid of low-margin special promotions from stores.
Outgoing chief executive Véronique Laury, who was given the axe in March, described the performance in France as “mixed” and said: "At this early stage of the year our expectations for the full year are unchanged, and we remain confident in our ability to deliver significant financial benefits over time."
READ: Were cultural differences the downfall of Kingfisher's French boss Véronique Laury?
Overall growth was helped by the ‘other international’ business, led entirely by gains in Poland and Romania, delivering 4.2% LFL growth.
Laury pointed out that sales of products under her new “unified and unique ranges” continued to grow ahead of non-unified ranges.
"This year we are focused on completing the building of our 'engine' and making our innovation more visible to customers,” she said.
As well as a new outdoor range rolled out to all markets in the quarter, the Frenchwoman said several other new and unique ranges will be launched over year, along with the pilot of a new convenience store concept.
Market analyst Neil Wilson at Markets.com said Kingfisher's innovation day was "all very nice", but he felt that investors "would prefer to see what the new strategy is going to look like and who the next CEO will be first".
"Pressure on management to come up with a new plan will mount and this could well include a look at breaking up this company into smaller parts. Sometimes you are not greater than the sum of your parts."
Kingfisher shares were down 3.5% to 233.3p on Wednesday morning.
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