Kingfisher profits down by 6%
Kingfisher, Europe's number one home improvements retailer, posted a 6 per cent fall in third-quarter profit, hit by a fall in sales in its main markets in France and the UK as well as unfavourable foreign exchange movements.
The group, which runs B&Q and Screwfix in the UK and Castorama and Brico Depot in France and elsewhere, said today it made a retail profit of £257 million in the 13 weeks to October 27th.
Retail profit was adversely impacted by £16 million due to translating euro and Polish zloty overseas profits into sterling.
"Our markets remain challenging, with consumer confidence still weak and so we maintain our strong focus on margin, costs and cash," said chief executive Ian Cheshire.
Many retailers are suffering in Europe as disposable incomes are squeezed by inflation, muted wages growth and austerity measures, and as shoppers fret over the implications of the euro zone debt crisis.
A continuing low level of housing transactions is also bad news for home improvement firms like Kingfisher.
The group's total sales fell 3.9 per cent to £2.71 billion, with sales at stores open over a year down 2.8 per cent on a constant currency basis.
Like-for-like sales fell 2.8 per cent in France and were down 3.8 per cent in the UK and Ireland.
But they only fell 0.8 per cent in Kingfisher's 'other international' division, which includes stores in Poland, China, Spain and Russia.
Kingfisher is the world's third largest home improvements retailer behind US groups Lowe's and Home Depot, with about 1,000 stores in eight countries in Asia and Europe.
It ended the period with net cash of £222 million.
The firm has tried to offset weak demand in many markets with a drive to improve profitability by buying more goods centrally, and directly, from cheaper manufacturing centres such as China.
Kingfisher shares, up 11 per cent over the past year, closed yesterday at 281 pence, valuing the business at some £6.65 billion.