Owner of B&Q, Kingfisher, has hiked its annual profit outlook. Despite a drop in sales for the DIY store, Russ Mould, investment director at AJ Bell, believes the group’s plan of targeting trade customers has ensured strong first-half results.
He said: “B&Q-owner Kingfisher’s strategy of targeting trade sales continues to pay off in spades and supported an eye-catching increase in full-year guidance alongside strong first-half results.
“The big driver of performance was the Screwfix chain, which derives most of its sales from trade customers.
“This cohort are a more reliable and consistent sources of revenue than ordinary punters. That’s because materials and tools are not a nice-to-have for them but essential to their day job.
“The trade part of the business is also benefiting from the shift from Do-It-Yourself to Do-It-For-Me, particularly among younger generations who are less confident taking on home improvement projects themselves.
“Kingfisher is growing its online sales and with a large proportion of these being fulfilled through click and collect, such transactions are helping to get customers through the doors of its physical stores.
“Despite the robust performance, there were indications of weaker consumer sentiment, with big-ticket items like bathrooms seeing an 8.1 per cent fall in the second quarter. This fed into a 1.8 per cent decline in second quarter like-for like sales for the B&Q chain overall.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.