Kingfisher PLC (LON:KGF), the home improvements retailer, reported sparkling first-quarter growth yet still disappointed the market.
The shares, which hit a nadir of 126.16p just before the first lockdown was introduced last year, fell 0.8% to 373.2p on the back of a fiscal first-quarter trading statement that was not quite strong enough to keep the share price momentum going.
Like-for-like (LFL) sales in the three months ended April 30 were up 64.2% year-on-year on a constant currency (CC) basis. To enable a comparison to be made with pre-pandemic trading levels, Kingfisher revealed that LFL sales on a CC basis were 22.5% up on the same period of 2019.
The retailer said it put in a strong performance in the UK and France, despite COVID-related restrictions affecting its French outlets through most of the quarter.
E-commerce sales were up 63% year-on-year and were 258% higher than two years ago. Online sales now account for 21% of the group’s sales, compared to 18% in the same period of last year.
The company raised the LFL sales outlook for the first half of the current fiscal year, with the company now expecting the growth rate to be in the mid-to-high teens, up from previous expectations of a low double-digit percentage increase.
Adjusted pre-tax profit is expected to be ahead of the board’s previous expectations, in the range of £580 - £600mln, or thereabouts.
Guidance for the second half of the financial year has been left unchanged.
“We continue to see high levels of demand from both new and existing customers, with clear progress made on our 'Powered by Kingfisher' strategic priorities, especially in four key areas,” said Thierry Garnier, the chief executive of Kingfisher.
"During the quarter we established a new agile operating model for our technology and digital teams, and further strengthened these teams with multiple new hires.
"Secondly, we are excited to have launched Screwfix as a pure-play online retailer in France in late April. Thirdly, our new own exclusive brand kitchen range is now available in all key markets, with very positive results despite lockdown restrictions.
"And finally we continue to develop, test and roll out multiple innovative propositions for our customers, with more compact store tests, a new mobile app for Screwfix, self-checkout terminals and our new tool for 3D kitchen and bathroom design. We have also started to roll out our NeedHelp services marketplace in B&Q and Poland,” Garnier said.
"Whilst the second half of the financial year remains naturally uncertain, we continue to see supportive long-term trends for our industry and are confident of continued outperformance of our wider markets," Garnier concluded.
This morning we released another strong set of results in our Q1 Trading Update, driven by empowered banners, e-commerce, new ranges, and innovative customer propositions. https://t.co/y0ly2iS5XB #PoweredByKingfisher #ecommerce pic.twitter.com/YiCEir20CR
— Kingfisher PLC (@kingfisherplc) May 20, 2021