Kingfisher Profits Fall on Tough Markets, Currency
Kingfisher, Europe's No. 1 home improvements retailer, posted a 6 percent fall in third-quarter profit, hit by a fall in sales in its main markets in France and the UK as well as unfavorable foreign exchange movements.
The group , which runs B&Q and Screwfix in the UK and Castorama and Brico Depot in France and elsewhere, said on Thursday it made a retail profit of 257 million pounds ($411 million) in the 13 weeks to October 27.
That compared to an analysts' average forecast of 255 million pounds, according to a company poll, and 273 million pounds made in the same period last year.
Retail profit was adversely impacted by 16 million pounds 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 percent to 2.71 billion pounds, with sales at stores open over a year down 2.8 percent on a constant currency basis.
Like-for-like sales fell 2.8 percent in France and were down 3.8 percent in the UK and Ireland.
But they only fell 0.8 percent in Kingfisher's 'other international' division, which includes stores in Poland, China, Spain and Russia.
It ended the period with net cash of 222 million pounds.
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 centers such as China.
Kingfisher shares, up 11 percent over the past year, closed Wednesday at 281 pence, valuing the business at 6.65 billion pounds.