B&Q has seemingly rebounded from an icy first quarter, as an extended period of warm weather gave the DIY retailer’s sales a lift.
The Kingfisher-owned chain clocked up a 3.6 per cent rise in like-for-like sales for the last three months, marking a sharp turnaround from the 8.8 per cent slide it suffered in its first quarter.
B&Q thanked the summer heatwave for the about-turn, which triggered strong sales of seasonal items, like BBQ’s and garden furniture.
B&Q forms part of the Kingfisher group, which also owns Screwfix and Castorama
B&Q’s stablemate, Screwfix, generated a 5.5 per cent uplift in same store sales during the quarter.
It comes after the Beast from the East and volatile consumer confidence kept home-improvers away at the start of the year, which includes the critical DIY Easter trading period.
The picture currently looks less pretty for Kingfisher’s main UK rivals. Wickes suffered sluggish sales in its second quarter, and earlier this week Homebase launched a CVA to close 42 stores after a disastrous takeover by Wesfarmers resulted in the chain being sold to Hilco for £1.
Boss Véronique Laury has implemented a five-year transformation plan
However, B&Q was up against a particularly weak performance in the equivalent period last year – it’s worst for a decade.
Kingfisher fared less well in France, where sales at its Castorama chain declined 3.8 per cent, ‘reflecting continued softer footfall and the impact of transformation-related activity’, the firm said.
The group is at the midpoint of a five-year transformation plan, which involves streamlining its buying processes to bolster buying power, and ramping up its digital prowess.
The changes have caused some disruption to sales over the last year as the group clears old stock and introduces new, ‘unified’ ranges.
In the trading update, ahead of next month’s detailed half-results, group chief executive Véronique Laury said: ‘We started our transformation two-and-a-half years ago and are on track to deliver our strategic milestones for the third year in a row.
‘In the second quarter, I’m pleased that we grew our sales after the exceptionally harsh weather conditions in the first quarter.’
She added that Kingfisher would bring forward new plans to bolster its results in France in the second half of the year.
Across the group, sales for the quarter rose 1.6 per cent to £3.26billion.
‘To some extent, the script at Kingfisher tends to write itself,’ said head of markets at interactive investor Richard Hunter.
‘Screwfix remains its main engine of growth, B&Q lags slightly, whilst by geography Poland remains positive and France under some pressure.
‘From an investment perspective, the adequate dividend yield of 3.8 per cent is underpinned by a supportive share buyback programme.
‘But the performance in France is something of a concern, where weaker footfall combined with higher costs combined to deliver a negative performance. This is quite apart from the uncertain UK economic outlook.’
Kingfisher’s share price, which Hunter said ‘has tended to focus on the negatives of late’, fell in early trading, and has declined 6 per cent over the last year.
B&Q recently lifted the lid on plans to invest £100million in price cuts as it backs away promotions and attempts to offer everyday low prices instead.