European home improvement retailer Kingfisher has today warned that current-year profit would fall short of analysts' expectations after it reported a 25% drop for 2023-24.
"In the short term, while repairs, maintenance and renovation activity on existing homes continue to support resilient demand, we are cautious on the overall market outlook for 2024 due to the lag between housing demand and home improvement demand," CEO Thierry Garnier said.
Shares of the FTSE 100-listed group, which owns B&Q and Screwfix in Ireland and Britain and Castorama and Brico Depot in France and other markets, have fallen 11% over the past year.
Kingfisher forecast an adjusted pretax profit for 2024-25 of £490-550m, below analysts' average forecast of £560m.
It said like-for-like sales in the first quarter so far were down 2.3% year-on-year, with an improved sales trend in the UK and Ireland, France and Poland compared to the previous quarter, and an improved volume trend in all three product categories - core, 'big-ticket' and seasonal.
For 2023-24, Kingfisher earned an adjusted pretax profit of £568m, in line with guidance that was cut in November, but down from the £758m it made a year earlier.
Total sales fell 1.8% to £12.98 billion, with like-for-like sales down 3.1%.
While sales in the UK and Ireland were positive and the division increased market share, sales in France and Poland were impacted by a more challenging consumer backdrop.
The group said it planned to simplify its business in France, including restructuring and modernising the Castorama store network.
Meanwhile, its CEO said that Britain's consumers are "very resilient" despite persistent inflation and high borrowing costs.
"We still see a very resilient consumer in the UK," CEO Thierry Garnier told reporters after the group reported its annual results.
"Our core categories that are really the bulk of our operation are very resilient in the UK," he said.
