B&Q owner Kingfisher faces sales dip amid tough French consumer market but remains optimistic

Kingfisher, the parent company of B&Q and Screwfix, has announced a decline in sales, largely driven by a weak consumer market in France.

The company reported a 1.5 per cent drop in sales to £12.78bn for the year ending January 31, as reported by City AM.

This decrease was primarily due to a 6.2 per cent fall in sales in France, while the UK and Poland remained steady.

The operating profit of the B&Q owner fell by 29.7 per cent to £407m, and pre-tax profit saw a decrease of 35.4 per cent to £307m.

Basic earnings per share nearly halved from 18.2p to 10.1p, with the company's total dividend remaining unchanged at 12.4p.

Despite making cost savings of £120m during the year, Kingfisher faces an annual cost inflation of £90m.

This is due to the combined impact of higher wages, increased employers national insurance contributions and their French equivalent, as well as the UK government's packaging fees regulations (the Extended Producer Responsibility scheme).

Despite these challenges, Chief Executive Thierry Garnier remains optimistic, stating that the company is "in its best operational shape for years."

He added: "For the first time in over six years, we grew our market share in all key regions."

He also noted that the company delivered profit and free cash flow in line with or ahead of initial guidance, demonstrating strong delivery against strategic objectives.

Kingfisher has reported that 'big-ticket' categories finally saw sales growth in the fourth quarter in both the UK and Poland, after years of Brits avoiding home renovations. Wickes echoed this trend in its annual results.

"Looking to the year ahead, the recent government budgets in the UK and France have raised costs for retailers and impacted consumer sentiment in the near term.