Sunday, September 15, 2019

B&Q LFLs drop 5.6% in Q1


Home and DIY retailer B&Q has today reported a 5.6 per cent fall in like-for-like (LFL) sales as cold weather impacted trade, it has been announced today.

In the 13 weeks to May 4th 2013, total sales decreased 5.7 per cent to £913 million while group sales dipped 0.4 per cent, according to results from B&Q owner Kingfisher.

UK & Ireland total sales, which include Kingfisher‘s Screwfix business, dropped 3.4 per cent and fell 4.7 per cent on a LFL basis as “unfavourable cold weather through March and early April impacted footfall” as sales of outdoor products, which can represent as much as 30 per cent of total sales over the first quarter, decreased 10 per cent over the period.

Bathroom sales were also weak though kitchen sales “delivered a solid performance” while indoor products fared better.

Many retailers point to unseasonable weather when reporting disappointing trade though Managing Director at analyst firm Conlumino believes that Kingfisher is right to place blame on cold temperatures.

“While Sir Stuart Rose once commented that “weather is for wimps”, Kingfisher has more justification than most to pull this old excuse out of the hat when explaining this quarter‘s weak trading results.

“Easter is a bit like the DIY sector‘s Christmas and is a key time for consumer activity and spending.

“Unfortunately, this year‘s dismal weather dampened consumer demand, both literally and metaphorically.

“Although a weak Easter has had a very tangible downward impact on B&Q, it is only one of a number of negative headwinds impacting the DIY sector. A

“Among these, the main one is a continued lack of traction in the housing market.

“Although we now see signs that activity is picking up, it will be some time before we return to robust levels of transactions which are critical for a healthy DIY sector.”

B&Q‘s Irish operations have struggled in recent months and the business called in an Examiner in February, though this process is now complete and the retailer is poised to achieve “significant rent reductions across the remaining stores”.

Screwfix saw sales reach £155 million, up 12.6 per cent in total and rising 1.7 per cent LFL as new ranges enticed shoppers and the retailer continued its rollout of new outlets, opening eight during the quarter while its click, pay & collect offer has also proved a success.

Kingfisher France, which incorporates its Castorama and Brico Dépôt operations, saw sales drop 3.8 per cent while LFLs declined 5.6 per cent, though the group remains positive about expansion of the latter brand after announcing plans last month for expansion of the format into Romania.

Kingfisher CEO Ian Cheshire highlighted the challenges faced during the quarter though believes the group is well-placed to improve its position.

“Market conditions have remained challenging in the first quarter compounded by the effects of an early Easter and unseasonably cold weather across Europe.

“As a result, general footfall was down and demand for outdoor maintenance, gardening and leisure products was adversely affected for a second year running.

“These impacts were particularly acute in March which resulted in that month accounting for the vast majority of the quarter‘s profit decline.

“However, our performance towards the end of the quarter was encouraging following a return to more normal weather patterns.

“Looking ahead, we still have our key summer season to come and we are ready to capitalise on any improvement in conditions during this peak trading period.

“We will continue to focus hard on our margin and cost initiatives helping us to reinforce our value credentials with customers during these challenging times.”