Kingfisher, Europe’s largest home-improvement retailer, said first-quarter profit rose more than expected after warmer weather and store refurbishments spurred sales at its B&Q chain.
Earnings before interest and tax climbed to £128 million in the 13 weeks ended May 2nd, a 39 per cent increase from a year earlier on a constant currency basis, the company said in statement.
The owner of the Castorama store chain in France said same-store sales fell 1.7 per cent, less than the previous quarter’s 4.1 per cent decline. UK revenue rose 0.9 per cent on that basis as Kingfisher revamped its British outlets, enlarged floor space for bathrooms and kitchens and increased prices. UK sales of outdoor products jumped 30 per cent.
“They were pretty strong in the U.K. and had a very strong margin performance,” said Chris Walker, an analyst at Nomura with a ‘neutral’ rating. “All focus will be on the UK today.”
The UK gross margin increased 80 basis points as Kingfisher offered fewer discounts and trimmed costs in its supply chain. Earnings increased 89 per cent to £61 million in the UK division.
“We are unlikely to see a weather-driven seasonal bounce in demand again in 2009 and we continue to plan for a particularly tough balance of the year in our major markets,” chief executive Ian Cheshire said in the statement.
The China division, where Kingfisher is closing 22 stores and revamping the remaining outlets, posted a loss of £14 million. In the international unit, which includes China, same-store sales fell 6.3 per cent.
Bloomberg