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B&Q lose sales but gain profit

Sales at DIY shed chain B&Q were down slightly in the first quarter, although both retail profit and gross margins rose.

B&Q lose sales but gain profit

Parent company Kingfisher’s trading statement shows B&Q UK and Ireland total sales down 2.1% to £1,048m for the 13 weeks to May 1, 2010.

Kitchen and appliance sales did well, rising 6%, with decorating products down 1% and seasonal and building products down 5% with retail profit rising 12% to £67m and gross margin nearly doubling at 90% ahead.

There was a 28% increase in triple packs of loft insulation, mainly down to the massively-discounted promotions on the back of CERT-funding.

According to Kingfisher, gross margins at B&Q were helped by better sales of higher margin products, continued shrinkage reduction and more direct sourcing.

Screwfix sales fell 0.8% to £118m; actions to counter the challenging market conditions included the launch of 64 specialist trade desks, exclusive to plumbers and electricians, within existing counters. Around 60% of total sales now come from Screwfix’s trade counters.

Kingfisher group total sales were broadly flat at £2,642m, with group retail profit was up 12%, boosted, said the company, by focus on improving margin and cost-reduction. Performance in France, which includes Castorama and Brico Depot, was strong, with a 2.2% uplift in sales to £1.1bn and a 14.7% jump in retail profit.

Kingfisher group chief executive Ian Cheshire said: “Sales were disrupted at the start of the quarter by heavy snow, and the prolonged cold weather also delayed the start to the outdoor spring season, contrasting with favourable conditions the previous year. However, our self-help initiatives helped us deliver flat sales whilst improving gross margin and cost productivity with the result that profit grew 12%.

About Fiona Russell-Horne

Fiona Russell-Horne
Editor-in-Chief across the BMJ portfolio.

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