Will the heatwave brighten up Kingfisher's (LON:KGF) Q2 results next Thursday?
So the B&Q and Screwfix-owner’s 2018 has been defined by a woefully received set of full year figures in late March. Before that point Kingfisher had been doing on, creeping up from an opening price of £3.37 to a 9 month peak of £3.64 by the end of February.
However, news of a 10% drop in annual pre-tax profit to £682 million on March 21st sent the stock sharply lower, with the company falling nearly 11% in a single session. Having sunk below £3 the firm has subsequently roamed between £2.90 and £3.10, with Kingfisher PLC now at a current trading price of £2.97 (Spreadex, 09/08/2018).
The last update came towards the end of May when the company revealed a ‘Beast from the East’-blighted set of first quarter results. Total group revenue fell 1.2%, and 2.5% at a constant currency basis, to £2.8 billion, with overall like-for-like sales down 4%.
Of course, with Kingfisher, it’s all about the details, with drastically different performances brand-by-brand, region-by-region. UK & Ireland like-for-likes were particularly dire, falling 5.4% as the severe weather added to the already soft footfall, with the impact of a 9% plunge at B&Q somewhat alleviated by a 3.6% rise at Screwfix.
In the continually troubled France division, comparable sales fell 3.9%, with Brico Depot’s meagre 0.8% increase outweighed by Castorama’s 8% drop. Elsewhere things weren’t as bad; Other International LFLs only fell 0.5%, an 18.6% surge at Screwfix Germany and a 1.8% jump in Poland countered by 5.6% and 6.5% declines in Iberia and Russia.
There is every chance Thursday’s second quarter report could be the exact opposite of the first, with the European heatwave a potential boost. Investors may also be keen to get a look at Kingfisher’s second half guidance, given how anomalous both Q1 and Q2 have been weather-wise.
Kingfisher PLC has a consensus rating of ‘Hold’ alongside a consensus target price of £3.40.
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