Home & DIY retailer B&Q has today announced encouraging sales figures for its third quarter, and suggested that trading has been boosted by the collapse of rival company Focus DIY earlier this year.
A statement released by parent company Kingfisher Group this morning shows that sales at B&Q UK & Ireland for the 13 weeks ending October 29th 2011 were up 0.4 per cent to £928 million, which although down 0.9 per cent on a like-for-like basis with last year, were relatively resilient considering the current state of the sector.
Retail profit grew by 20.6 per cent to £46 million, with gross margin up 50 basis points against tough comparisons with 2010, while overall Kingfisher Group retail profits jumped 13.1 per cent helped by more direct sourcing and the start of common ranging.
Kingfisher snapped up 29 former Focus DIY stores when it went under in the summer, and all but two of those were opened under the B&Q brand in Q3, helping total group sales rise 3.5 per cent to over £2.8 billion.
As well as benefiting from the disappearance of a major player in the sector, the unseasonably warm weather experienced in the autumn helped boost trading too, with outdoor seasonal product sales up 12 per cent and garden furniture up 68 per cent.
B&Q’s sister company in the UK, Screwfix, saw total sales rise seven per cent year-on-year (yoy) to £136 million and retail profits increased by 26.6 per cent to £10 million.
Internationally, the group’s French operations performed particularly strongly.
Ian Cheshire, Kingfisher Group CEO, said: “Our well-established programme of self-help initiatives (‘Delivering Value’) has continued to drive our growth despite these difficult times for European consumers.
“I am pleased that our teams’ hard work has resulted in healthy sales growth and a 13 per cent profit growth in our third quarter, one of our most significant trading periods of the year, particularly in France.
“Looking ahead, the short-term outlook in our major markets remains challenging but Kingfisher is in good shape, and we are more able to drive market share gains, profit growth and higher cash returns.”
In an ever-changing retail space, the company will need to continually develop its product offering and business operations, and having launched its in-store trade-only service Tradepoint offering last year to considerable success, there could be more new initiatives on the horizon.
Cheshire added: “I’m enthusiastic about our longer-term prospects and the team here is excited about formally launching the second phase of self-help initiatives next year to drive more growth and shareholder value over the coming years.”
Caroline Gulliver at investment bank Espirito Santo said that today’s statement proves Kingfisher’s current strategy of improving margins by direct sourcing rather than pricing is a sustainable one.
She noted: “Kingfisher has reported a strong set of Q3 results, with group retail profit up 14 per cent yoy to £273 million, which is four per cent ahead of our £262 million forecast, and we think was either in line with or a touch ahead of consensus expectations.”