Kingfisher's first quarter: What the analysts say

“While Sir Stuart Rose once commented that ‘weather is for wimps’, Kingfisher has more justification than most to pull this old excuse out of the hat when explaining this quarter’s weak trading results. Easter is a bit like the DIY sector’s Christmas and is a key time for consumer activity and spending. Unfortunately, this year’s dismal weather dampened consumer demand, both literally and metaphorically. B&Q’s numbers show this with, for example, sales of nursery plants down 16% on last year” - Neil Saunders, Conlumino

“Like-for-like sales were expected to be -2% in the UK, but, despite the weak comp, B&Q in the UK was again hit hard by “the weather”, with like-for-like sales 4.7% down and “seasonal sales” (ie gardening and outdoor lines) 10% down in Q1, despite the massive 30% decline in sales of these categories last year. The market was hoping for more positive vibes elsewhere, but LFL sales were over 4% down in both France (on a calendar adjusted basis) and in Poland. The weather in Poland was particularly cold in March and though April picked up everywhere, with the warmer weather, as illustrated by a neat ‘Next-like’ chart of the weekly pattern of sales, it looks like the City underestimated the hit to trading in March.” – Nick Bubb, independent

“Many will be willing to give B&Q the benefit of the doubt, but we are not so sure. We have factored in a boost to sales from government policy but the fact remains that this is a fundamentally over-spaced business, trading in an industry in which there are structural headwinds. Consumer confidence remains poor, and even if ‘Help to Buy’ does get the housing market going, returning B&Q to historic sales density levels is going to be increasingly difficult.” - Eithne O’Leary, Oriel Securities

“Overall this is a weak result, coming in around £25-30m shy of general expectations. Whilst some of this is in Other International in the quietest quarter and can be clawed back, the shortfall in core markets (especially UK/France) may be harder to claw back notwithstanding comments about a bounce back in footfall and demand since the weather turned. We therefore expect forecasts to come down by around 2% today, and perhaps for the perception of risk to increase given current weather is hardly brilliant.” - Matthew McEachran, Singer

“Time is running out for Kingfisher to avoid another profit fall in the first half. That said, the weather clearly impacted on sales in March and in early April, while there was a better performance towards the end of the quarter. Also, there are many important trading months to come and Kingfisher therefore remains optimistic. However, B&Q’s like-for-like sales have been negative for 11 out of the last 13 quarters, something of a trend, we feel, while the profit performance relative to France is stark.” - Philip Dorgan, Panmure Gordon

“In France, like-for-like sales fell 5.6%, also on bad weather and weak consumer confidence, leading to retail profit down 14%. There has been a pick up in French housing starts so this should lead to an improved sales trend as the year progresses. Other international made a £2m loss compared to a significant profit last year and the main culprit was Poland which had some awful weather and some significant reinvestment in pricing.” - Caroline Gulliver, Espirito Santo