Kingfisher hits seven-week low

KINGFISHER, EUROPE’S largest home-improvement retailer, fell the most in seven weeks after sales missed estimates in France and increased discounting fuelled concern over profitability.

The shares declined as much as 3.2 per cent.

French same-store revenue slid 2.3 per cent in the 10 weeks to July 7th at a time when analysts had projected growth. Kingfisher gets more than 40 per cent of sales and half of profit from the country, where lower sales at the Brico Depot chain outweighed growth at Castorama stores.

Brico Depot, which supplies products to small builders and do-it-yourself enthusiasts, was affected by the timing of July public holidays in France, Kingfisher said. In Britain and Ireland, same-store sales at the BQ chain rose 1.6 per cent as the retailer stepped up promotions on indoor products such as paint to lure shoppers soaked by record rainfall.

The division’s second-quarter gross margin is expected yo be down, the company said.

Kingfisher gets more than 40 per cent of revenue from Britain and Ireland, where soggy weather has kept gardeners indoors.

After the wettest June on record, England has already had 150 per cent of the normal amount of rain it usually gets in July, the Met Office has said.

"With rain reaching almost biblical proportions, we had to work hard to tempt customers out," chief executive Ian Cheshire said. – (Bloomberg)