Britain's Kingfisher lifts profit view as DIY booms in pandemic

LONDON: UK home improvement retailer Kingfisher raised its profit outlook on Tuesday as it reported another big jump in sales, continuing to benefit from the popularity of do-it-yourself (DIY) projects during the COVID-19 pandemic.

Kingfisher, which owns B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, is seeing strong demand as many people have rediscovered DIY during the crisis as they spend more time at home, have fewer leisure options and are travelling less.

Shares in Kingfisher were up 2.6% at 0844 GMT, extending year-on-year gains to 34%, after the company said like-for-like sales for its fourth quarter to Jan. 9 rose 16.9% year-on-year, with online sales more than doubling.

Total underlying sales had increased 17.4% in the previous quarter. Kingfisher said like-for-like sales in December were up 20.8% in the UK & Ireland and jumped 29.4% in France.

As it is deemed an essential retailer, Kingfisher's stores have been allowed to stay open during lockdowns.

"A broad-based strong regional performance speaks to the enduring appeal of DIY in the time of COVID as infections and restrictions surge once again," said analysts at Jefferies.

Prior to Tuesday's update, analysts' average forecast for 2020-21 adjusted pretax profit was 700 million pounds ($948.22 million), up from 544 million pounds in 2019-20.

However, based on trading to date, Kingfisher said it was comfortable with the top end of the range of analysts forecasts of 667 million to 742 million pounds.

Last month, Kingfisher said it would return 110 million pounds of business rates relief that falls in the 2020-21 year to the British and Irish governments.

The pandemic has also boosted shopping online. Kingfisher highlighted e-commerce sales growth of over 150% in the quarter.

"While the strength of our Q4 trading, to date, is reassuring, uncertainty over COVID-19 and the impact of lockdown restrictions in most of our markets continue to limit our visibility," CEO Thierry Garnier said.

Looking to the longer term, he said he was confident the strategic and operational actions Kingfisher was taking would build a strong foundation for sustainable growth.