European home improvement retailer Kingfisher is forecasting profit growth this year of 2% at best, with its markets expected to remain subdued, a forecast below analysts' consensus expectations that hammered its shares.
The FTSE-100 listed group owns B&Q and Screwfix in Ireland and the UK and Castorama and Brico Depot in France and other markets.
Its shares fell 11% after it guided for adjusted pretax profit of £480m to £540m in its year to the end of January 2026 - below analysts' average forecast of £543m.
Macro-economic uncertainty has pressured consumer demand for big home improvement projects on both sides of the Atlantic. Last month US giants Lowe's and Home Depot both forecast a tough 2025.
"Looking to the year ahead, the recent government budgets in the UK and France have raised costs for retailers and impacted consumer sentiment in the near term," Kingfisher CEO Thierry Garnier said.
The group is facing £145m of additional operating costs in 2025/26, including higher pay rates, higher social security payments in the UK and France and the impact of new packaging fee regulations in the UK.
Its best case scenario for home improvement market growth in the UK & Ireland in 2025 is "low single digit growth", with France "flat" and "low single-digit growth" in Poland.
Kingfisher reported a 7% fall in 2024/25 adjusted pretax profit to £528m, reflecting weak demand for more discretionary "big-ticket" categories such as kitchens and bathrooms.
Though sales fell 1.5% to £12.8 billion, the group grew market share in all key regions for the first time in over six years.
Garnier said the group would focus on what was in its control - growing its market share, growing its e-commerce and trade customer sales and continuing the restructuring of Castorama in France.
Having recently completed a £300m share buyback, Kingfisher announced another £300m programme. It maintained its dividend at 12.40 pence a share.
