Kingfisher (LON: KGF) stock went up by midmorning in London on Monday after the home improvement company said it had a good first quarter of its fiscal year. This helped ease worries that the end of the pandemic and rising prices were hurting the sector.
The company that owns B & Q, Screwfix, and Castorama in France said it would buy back another 300 million pounds ($378 million) of its own stock and reaffirmed its forecast for the year through January 2023. This came after the company said that sales through April were up 16% from pre-pandemic levels.
The company said, “Demand remains strong, and sales across all brands and customer segments are in line with our expectations.”
By 5:25 AM ET (09:25 GMT), Kingfisher stock had gone up 2.2%, making it one of the best performers in the FTSE 100 index. It’s still down 25% this year, though, because of a drop in the global market and higher taxes and energy prices in the U.K., which is its main market.
There were clear signs that the huge increase in business that the pandemic had caused was ending. Comparable sales were down 5.4% from the same time last year, and they were down around 16% in the U.K. and Ireland, where half of the group’s business comes from. Even though sales at Brico Depot and Castorama fell by 3.7%, the company gained a lot of market share in France. This drop was partly made up for by its other European operations, which grew by 37%, thanks to a gain of more than 50% in Poland.
Kingfisher said that so far in this quarter, its “good momentum” had not changed. Comparable sales were only down 2.5% from last year’s high levels in the first half of May. One percentage point of that drop was due to the timing of Easter.
The group also tried to reassure investors about two key issues that have caused a lot of worry during the current earnings season. It said that it “continues to manage inflation pressures well” and that it had “good product availability.”
Many U.S. retailers’ earnings last week were not as good as Kingfisher’s news. However, home improvement stores like Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) did better than other specialty and department store names in the U.S.
