Kingfisher, Europe’s largest home-improvement retailer, has given a glum outlook for the business climate in France, where a depressed consumer economy continues to weigh on its Castorama and Brico Depot chains.
Shopper confidence "is still weak with no obvious signs of an imminent improvement," chief executive Ian Cheshire said today in a statement.
However, Kingfisher reported a slight gain in third-quarter earnings on growth in the UK.
Kingfisher gets about half its profit from France, where the economy unexpectedly shrank in the third quarter as President Francois Hollande failed to revive corporate investment in the face of one of the world’s heaviest tax burdens.
The retailer’s French earnings were unchanged in the quarter, while UK operating profit gained about 8%.
Group retail profit in the 13 weeks ended November 2 rose 5.8% to £271m, or 1.7% at constant exchange rates, Kingfisher said.
"Whilst we have delivered sales growth in each of our geographies our markets remain challenging, especially in France," Cheshire said in the statement.
Sales at French stores open at least a year were unchanged in the quarter, while retail profit in the country was also about the same as a year earlier at £140m. Excluding currency shifts, profit in France fell 5.6%.
In Britain and Ireland, same-store sales at the B&Q chain rose 0.4%, missing the 1.2% estimate of 13 analysts in a Bloomberg News survey. Retail profit gained 7.9% to £63m.
Kingfisher is contending with weak consumer confidence across continental Europe and weak housing market in Ireland and Britain.
The company said in October that the head of the UK B&Q chain left after almost two decades with the company in a management shakeup after competition from online bathroom retailers and discount stores.
