Kingfisher PLC (LSE:KGF) saw its profits slump by 30% and sales fall in its first half, although the home improvements retailer noted that its sales are now significantly ahead of pre-pandemic levels.
The FTSE 100-listed firm reported pre-tax profits of £474mln in the six months ended July 31, 2022, compared to £677mln at the same stage last year, with the group highlighting strong comparatives and a more challenging environment.
Kingfisher, which owns B&Q, Screwfix in the UK and Castorama in France, saw first-half sales fall by 4.1% on a like-for-like basis to £6,809mln, propped up by resilient performances in DIY and DIFM trade, but margins fell by 130 basis points.
The company said it had made an encouraging start to trading in the second half of the year with third quarter like-for-like sales up 15.2% on a three-year basis to September 17, 2022, helped by continued resilience in outdoor and 'big-ticket' category items, although like-for-like sales on a one-year basis were down 0.7%.
In the results statement, Thierry Garnier, Kingfisher's chief executive officer, said: "Looking to the months ahead, although trading in the year to date has been in line with our expectations, we remain vigilant against the more uncertain economic outlook."
Current trading, combined with the first half performance, is consistent with current profit guidance of £770mln, Kingfisher said, although it added that it has looked at alternative trading scenarios for the rest of the year which point to a pre-tax profit range of around £730mln to £770mln.
Kingfisher said it plans to target further market share growth but anticipates full-year gross margins to be in line with pre-pandemic levels of around 37%.
Further investment is planned in Screwfix France, the company added, which it anticipates a reduction in stock levels in the second half related to the sell-through of a large part of 'buffer' stock previously held to protect product availability.