Kingfisher shares stumble on weak performance in France and at B&Q

Shares in Kingfisher, the owner of B&Q and Screwfix, fell nearly 7% on Wednesday after the Group reported a decline in sales in Q1 thanks to weaker performance in France and at its B&Q chain.

The FTSE 100 retailer said LFL sales had dropped 0.6% in the first three months of the year, primarily caused by a 5.5% decline in its French chains Castorama and Brico Depot. This was compounded by falling sales at B&Q, which saw a 4.6% decline on a constant currency basis.

20.3% growth in revenue at one of the Group's smaller retailers, Screwfix, offered the company some respite, offsetting much of the decline at its three biggest chains. 

Despite the results, the company said it remained on track to deliver its year two strategic milestones, and stressed that it had returned £79m to shareholders in the year so far via its share buyback.

The business continued to enjoy currency tailwinds from Brexit, with total reported revenue growing 5% but falling 0.9% on a constant currency basis. 

CEO Véronique Laury said strong performance from Screwfix and in Poland had continued but admitted that France remained weak. 

"In addition, we are experiencing some business disruption given the volume of change, as we clear old ranges, remerchandise new ranges and continue the roll out of our unified IT platform."

She added that the company was encouraged by early customer reactions to its new ranges, especially in France, and that it was progressing well with its IT platform which is now live in a third of Castorama stores and is central to its digital plans.

Shares in Kingfisher fell 6.7% early on Wednesday, with the stock currently trading at a 2017 earnings P/E of 12.6, in-line with the sector-wide average of 12.4.