Kingfisher Raises Profit Outlook as B&Q and Screwfix Drive Strong Sales
LONDON - Kingfisher, the owner of B&Q and screwfix, has increased its full-year profit forecast following a period of robust sales growth. The retail group reported a 10.2% rise in adjusted pre-tax profit to £368m for the first half of the year, and now targets the upper end of its £480m to £540m profit range. Shares in Kingfisher jumped 17% in London trading Tuesday morning.
The positive results were driven by strong performance across its key brands.B&Q saw comparable sales growth of 4.4%, while Screwfix contributed 3% growth.Kitchen installations at B&Q were up 36% year-on-year, with the introduction of three price ranges - Essential, Select, and Signature – proving popular, notably the ’Essential’ range which accounted for a quarter of kitchen sales in the first half.
Favorable weather conditions in the UK boosted sales of seasonal products like gazebos, pergolas, garden furniture, outdoor paint, and plants. However, Kingfisher noted unusually cold spring and summer weather in Poland impacted sales in that market.
The company has also benefited from the recent challenges faced by competitor Homebase, which entered governance in December and whose stores were largely acquired by The Range.
Kingfisher is navigating increased costs, including £145m from wage inflation, higher UK employer national insurance, increased social taxes in France, and new UK packaging fees. The company expects to offset these costs through improved gross profit margins and cost-saving measures, aided by a £33m business rates refund in the UK.
As part of cost reduction efforts, Kingfisher recently announced 672 job cuts at B&Q, primarily in stores, with an additional 65 roles to be eliminated at its London headquarters. The company is also “rightsizing” B&Q stores, adapting them to the needs of smaller households, a move it insists is not linked to ongoing concerns over potential increases to business rates.
Kingfisher, along with other retailers, is lobbying the government against proposed plans for higher property taxes on larger buildings, with the British Retail Consortium warning up to 400 large shops in the UK could be at risk of closure if the changes are implemented.
The retailer is investing in technology, including self-checkouts, AI tools, and a visual search tool that helps customers find replacement parts.
