Kingfisher, Europe's second largest home improvement retailer, warned today the outlook for the UK market was "more uncertain" after a recent deterioration in trading, sending its shares sharply lower.
The stock fell as much as 8% in early trading after the group said its B&Q and Screwfix businesses in Britain experienced softer sales in the fourth quarter of its 2017-18 financial year.
UK consumers’ discretionary spending is under pressure as inflation outpaces wage rises and because of ongoing uncertainty in the UK economy ahead of Brexit.
Traditional store groups are also struggling with a boom in online shopping.
B&Q's like-for-like sales fell 5.1% in the quarter to January 31, while growth at Screwfix dipped to 7.1%, having been 10.2% in the previous quarter.
Kingfisher said the outcome reflected softer demand for "big ticket" categories such as kitchens.
"Overall confidence is not great right now," chief executive Véronique Laury said. "The UK is more uncertain."
Kingfisher, which also trades as Castorama and Brico Depot in France and elsewhere, made an underlying pretax profit of £797m in the year ended January 31.
This was ahead of analysts' average forecast of £783m and 1.3% above the £787m it made in 2016-17.
The outcome reflected a weak performance in France offset by growth at Screwfix and in Poland. Sales rose 3.8% to £11.7 billion and Kingfisher raised its dividend by 4% to 10.8 pence a share.
Kingfisher, which trails France's Groupe Adeo, has just finished the second year of a five-year plan to boost annual profit by £500m from 2021.
The plan, costing £800m over five years, involves unifying product ranges across its various brands, boosting e-commerce and seeking efficiency savings.
Laury said good progress had been made and was confident the plan would be delivered.
She said the outlook for France was "encouraging yet volatile," while the Polish market "remains supportive".
