Disappointing Q3 results for Kingfisher
Published: 20 November 2019 - John King
Quarter three sales for Kingfisher for 2019 were registered at £3 billion, down 3.2% in constant currency. Like for like growth (LFL) was also down 3.9%, which the company has attributed to disruption from new range implementations, lower promotional activity and ongoing operational challenges in France, and softer market conditions in its main markets.
In the UK and Ireland, B & Q sales were down by -3.5% and LFL -3.4% , due to the impact of the implementation of new surfaces and decor and kitchen ranges. However, Screwfix sales were up 7.9% (LFL 3.7%), due to seven new outlets opening during Q3.
In France, its Castorama and Brico De´po^t sales were also down (-6.0% and -6.4%) respectively. In Poland, sales were down -0.8% and in Romania, sales down -0.6%.
Commenting on the results, Thierry Garneir, chief executive officer, said: "In my first eight weeks at Kingfisher I have immersed myself in our operations, listened to colleagues, visited stores and met with our customers and suppliers. I am proud to be leading a Group with strong assets, excellent market positions, differentiated business models and strong brands. I have also been encouraged by the commitment of our colleagues, and by proof of product innovation.
“However, it is clear that there is much to do to improve our performance. Kingfisher’s trading during Q3 was disappointing. My early assessment is that we have not found the right balance between getting the benefits of Group scale and staying close to local markets. We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel. Altogether, this has brought disruption to sales and has distracted the business from focusing on customers. In addition, we faced softer market conditions in our main markets during the period.
“I am pleased to have strengthened my executive team with the appointment of three outstanding leaders: Bernard Bot, a seasoned CFO with a strong background in supply chain and digital, Alain Rabec, a highly experienced retailer as our new CEO of France, and John Wartig, formerly our interim CFO, as our Chief Transformation and Development Officer. Further appointments are in progress.
“As a team, our priority is to fix our operational issues – particularly in IT and supply chain in France – and refocus our efforts. This includes stopping or pausing a number of initiatives to concentrate on stabilising performance and trading. The effect of these changes will not be immediate.
“In parallel, we are building a longer term plan to refocus on our customers, simplify our model, embrace digital and return our business to growth. I look forward to providing an update on the business and our strategic priorities in March, within our full year results.”