The publication of trading updates and results is often an exciting time for those with an interest in the Kingfisher (LSE:KGF) share price. Before today (28 May), three of its last four press releases have caused a double-digit share price movement — one up and two down.
But during the first hour of trading this morning, things were calmer. Its share price fell around 2% after the B&Q and Screwfix owner released a trading update for the quarter to 30 April.
| Date | Event | Share price movement (%) |
|---|---|---|
| 21 May 2024 | Q1 FY24 trading update | +0.1 |
| 17 September 2024 | HY FY24 results | +11.2 |
| 25 November 2024 | Q3 FY24 trading update | -13.3 |
| 25 March 2025 | FY24 results | -14.1 |
What was in the update?
The company said it had seen a “good start to the year” and is on course to meet its full-year guidance.
Analysts had been expecting a 0.7% fall in like-for-like sales and total group revenue to be £3.21bn. In fact, the company was able to grow its top line by 1.8% — it was £100m higher than expected at £3.31bn.
However, there was a mixed picture across its markets.
The performance in the UK and Ireland was strong with a 6.1% increase in sales.
Although France delivered “sequential improvement” and outperformed “challenging market conditions”, sales fell 4.9%. And in Poland, unspecified “geopolitical factors” were blamed for a 0.4% drop. But it claims to have made “market share gains” in all regions.
Yet it can’t afford to be complacent. The DIY sector remains highly competitive and is becoming increasingly saturated. Many online challengers are seeking to disrupt the market.
Defensive qualities
In many respects, Kingfisher’s well placed to deal with the turbulent times in which we live. It says that “consumer sentiment remains mixed across our markets”.
However, during an economic downturn, cash-strapped homeowners tend to undertake DIY projects themselves, rather than employ professionals. And instead of moving home, they might refresh their current properties.
On the other hand, a growing economy results in more people moving. In these circumstances, homeowners take the opportunity to redecorate or make other changes.
Given recent events, it’s not surprising that the group’s keen to point out that it doesn’t have any US exposure. It buys most of its products from Europe and sells them in the same countries as it buys. However, the group says it’s monitoring the possible impact on both inflation and market demand.
To expand, Kingfisher’s trying to widen its trade offering, which accounted for 17% of sales during the quarter.
In addition, online sales continue to grow and contributed one fifth to group revenue in the period. This is important as, in my opinion, it’s logistically difficult operating over 1,900 stores in seven countries.
Ageing homes and the demand for more energy-efficient properties are seen as key drivers of growth in a market that the company says is worth £160bn a year.
My view
Despite the reaction of investors in early trading today, I think the group has lots going for it. It has many defensive qualities and its addressable market is enormous. Also, it has a portfolio of strong brands.
Its dividend isn’t bad either. Based on amounts paid over the past 12 months, the stock’s currently yielding 4.3%.
For these reasons, I think Kingfisher’s a stock that investors could consider. However, recent history suggests that its share price is likely to be volatile.
