Kingfisher Group has seen a difficult third quarter, with like-for-like sales falling by 0.5% to £3 billion.
This dip, it said, reflected continued weak sales in France and a slightly lower impact from business disruption than the first half of the year.
However, it claimed to be on track to deliver its full-year strategic milestones.
Total sales in the UK and Ireland increased by 2.5% to £1.27bn, and were up 1.5% on a like-for-like basis, which it said reflected a continued strong performance from Screwfix (sales up 16.6% year on year) and modest price inflation.
B&Q saw a 2.9% dip in sales, down 1.9% on a like-for-like basis, reflecting annualisation of its completed store closure programme.
Chief executive Véronique Laury said: “Q3 has followed a similar course to the first half. We have seen strong growth at Screwfix and in Poland, offset by continued weak sales in France, alongside some business disruption from our One Kingfisher plan, principally reflecting product availability and clearance. We continue to act on the causes of this disruption, which we are confident will ease.
“We remain on track to deliver our full-year strategic milestones, for the second year in a row. With plans in place to support our overall performance, we remain comfortable with full-year profit expectations.
“We remain confident in our ability to deliver our long-term plan and in the financial and customer benefits it will generate. Early customer reaction to our new ranges continues to be encouraging. We recognise that the transformation plan involves a lot of change for our colleagues and appreciate their continued hard work and expertise.”
Thomas Brereton, retail analyst at GlobalData, commented: “While overall UK sales increased to £1,274m, the dichotomous results at Kingfisher UK continue with B&Q sales down 2.8% to £875m amid continued disruption from the ‘One Kingfisher’ transformation plan. Meanwhile, Screwfix continued to record impressive double-digit growth, increasing 16.6% on last year to bring total sales to £399m, and logged equally impressive like-for-like sales growth of 10.2%.
“This poor B&Q performance was anticipated by CEO Véronique Laury, reflecting B&Q’s store rationalisation programme not yet annualising out and product clearances to reduce SKUs. Furthermore, a 1.9% decline in B&Q’s like-for-like sales is underwhelming, even amid a challenging DIY market, and particularly compared with a 2.4% increase at competitor Wickes for the three months to September 2017. Further disruption is anticipated from the One Kingfisher programme, but these steps to simplify its range and drive online are necessary to compete in an increasingly multichannel sector.
“On the other hand, Screwfix continues to grow at a tremendous pace, driven by its strong digital capability – building on the 47% increase in click and collect in H1 2017/18 – and extended specialist ranges. In addition, growth in store numbers (up 12 stores for 545 total across the UK and Ireland) demonstrates an appropriate response to convenience as a key driver for store choice.
“Investors and senior management alike will be concerned by what is yet another unattractive update on the road to achieving Laury’s ‘One’ vision. In light of these results, Screwfix now represents over 30% of total UK sales for Kingfisher, as opposed to 23% two years ago. Given Screwfix’s buoyancy, speculation that Kingfisher might sell its fastest-growing subsidiary for a quick profit could intensify, in a bid to further support B&Q’s transformation.”