Sales at DIY chain B&Q tumbled in the second quarter, with the firm blaming wetter-than-usual summer weather for the slump.
Figures posted by the retailer’s parent firm Kingfisher showed like-for-like sales at B&Q fell 4.7 per cent in the three months to 31 July.
Total sales at the chain fell 7.7 per cent to £967 million and come alongside a slowing housing market in the UK following the Brexit vote.
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Kingfisher also pinned the fall on tough comparatives from last year and a strong first quarter in 2017, when better weather meant shoppers bought seasonal products early.
Meanwhile, the Australian owner of rival Homebase revealed a UK loss for last year after trading was hit by costs linked to an overhaul of the retailer’s store estate.
There aren’t many bright spots for investors in these resultsGeorge Salmon
In the first financial year since Wesfarmers snapped up Homebase for £340m, its subsidiary Bunnings UK booked a £54m loss on revenue of £1.2 billion. The Australian group has been trying to reposition Homebase, including rebranding it as Bunnings.
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Kingfisher chief executive Véronique Laury, who has been overseeing a turnaround at the firm and aims to boost profits by £500m a year by 2021, said: “Q2 has broadly followed a similar course to Q1 although B&Q’s performance was impacted by seasonal swings across Q1 and Q2.
“We have also continued to experience some disruption across the businesses, although on an improving trend. Availability of this year’s unified and unique product is now approaching normal levels.” She added that Kingfisher remains “cautious” on the second-half outlook for the UK and France, with the firm having previously flagged Brexit as creating uncertainty.
Total like-for-like sales fell 1 per cent in the UK, while the group as a whole recorded a 1.9 per cent fall.
Kingfisher also saw sales slip in France, where it trades as Castorama and Brico Dépôt, with total like-for-like sales down by 3.8 per cent and where the housing market has also stuttered.
However, one bright spot is again expected to be Screwfix, which saw like-for-like sales rise 10.8 per cent. The trade-focused chain has been the stand-out performer for Kingfisher of late, regularly clocking up double-digit sales increases.
Neil Wilson, senior market analyst at ETX Capital, said: “More of the same from Kingfisher with a massive outperformance by Screwfix trying gamely to mask an otherwise pretty ropey set of numbers from the rest of the group. This time the trade-focused brand’s leap in sales was not enough to paper over the cracks.”
He also addressed the suggestion of Screwfix becoming a standalone business, but added that common sourcing savings “may be the reason not to go down this route”.
Also commenting was George Salmon, equity analyst at Hargreaves Lansdown. He said: “It’s sometimes difficult to get a grip on the underlying direction of travel at Kingfisher, so dependent is the group on the vagaries of the weather.
“However, with the transformative ‘One Kingfisher’ plan suffering from disruption and like-for-like sales in both France and the UK in negative territory, there aren’t many bright spots for investors in these results. A silver lining of sorts is that it looks like Kingfisher isn’t alone in having difficulties in the UK. The group’s flagship B&Q chain saw like-for-like sales fall 4.7 per cent, which is similar to the 4.3 per cent fall at Bunnings UK, the new owner of Homebase.”
In March, Kingfisher signalled it had finished its B&Q store-closure programme, which has seen it shut 65 shops and slash about 3,000 jobs in the UK and Ireland over the last two years.