Kingfisher Q2 Sales Rise; Cautious On Short-term Outlook

(RTTNews) - Home improvement retailer Kingfisher PLC (KGF.L) reported Thursday higher sales in its second quarter, with improved performance mainly in the UK, France, and Poland. Looking ahead, the company said it remains cautious on the short-term outlook.

The company's second-quarter total sales were 3.03 billion pounds, an increase of 8.4 percent on a reported basis, and 3.2 percent in constant currency. Like-for-like or LFL sales in constant currencies were up 3 percent driven by UK and Poland.

In the UK and Ireland, total sales were up 5.1 percent from last year to 1.36 billion ponds. LFL sales went up 7.2 percent benefiting from continued strong Screwfix performance with 24.5 percent increase. B&Q UK & Ireland sales were up 0.3 percent despite store closures.

Sales in France were 1.130 billion pounds, up 10.4 percent on a reported basis, but down 1.4 percent in constant currency and down 3.2 percent on LFL basis.

Other International sales grew 12.8 percent from last year to 539 million pounds, with strong growth in Poland and Spain.

Sales in Poland grew 16 percent helped by supportive market and new ranges. LFL of seasonal increased 10.7 percent and LFL of non-seasonal, including showroom, grew 6.5 percent.

Véronique Laury, Kingfisher CEO, said: "In the UK, the EU referendum result has created uncertainty for the economic outlook, although there has been no clear evidence of an impact on demand so far on our businesses. In France, widespread industrial action and exceptionally wet weather created a more challenging environment, after a more encouraging Q1."

Looking ahead, the company expects gross margins in France to be up around 50 basis points citing less promotional activity, while it expects margins in the UK to be down around 100 basis points.

Poland's gross margin is expected to be up around 150 basis points reflecting strong trading.

In London, Kingfisher shares were trading at 363.50 pence, up 1.54 percent.