Profits at British home improvement retailer, Kingfisher PLC (LON:KGF), slumped 30% in the first half, although sales are now significantly ahead of pre-pandemic levels.
Pre-tax profits of £474mlm compared to £677mln at the same stage last year as the group highlighted strong comparatives and a more challenging environment.
Sales fell by 4.1% on a like for like basis to £6,809mln, with resilient performances in DIY and DIFM trade, but margins fell 130 basis points.
Kingfisher, which owns B&Q, Screwfix and Castorama, said it had made an encouraging start to trading in the second half of the year with quarter three like for like sales up 15.2% on a three year basis to September 17th, with continued resilience being seen in outdoor and 'big-ticket' category items, although like for like sales were down 0.7%,
Current trading, combined with the first half performance, is consistent with current profit guidance of £770mln, Kingfisher said, although it added it has looked at alternative trading scenarios for the rest of the year which point to a pre-tax profit range of around £730mln to £770mln.
Kingfisher said it plans to target further market share growth but anticipates full year gross margins to be in line with pre-pandemic levels of around 37%.
Further investment is planned in Screwfix France while Kingfisher anticipates a reduction in stock levels in the second half related to the sell-through of a large part of 'buffer' stock previously held to protect product availability.