Weak start to FY24 as expected A weak start to FY24 was expected, with management guiding at the FY results to expect weakness from adverse weather conditions in March and a tough Polish comp from a particularly strong quarter last year. Q1 Group sales (to 30 April) grew 0.8% (-2% CC) with LFL sales down 3.3% including a -0.5% calendar effect (Bloomberg consensus -4.7%) which implies a slowdown in March and April compared to total sales growth of 1.9% reported for February. Performance from core and ‘big ticket’ categories (82% of sales) was resilient with LFL -1.3%. Seasonal categories LFLs fell 11% showing the weather impact. By main divisions, UK sales were up 1.4% (Bloomberg consensus -2.4%) with B&Q and Screwfix down 0.8% (cons -4.6%) and 1.6% (cons. -1.8%) respectively. In France, LFL sales were down 4.1% (cons -3.1%) with Castorama and Brico Depot LFL down 3.1% (cons. -2.8%) and 5.2% (cons. -3.8%) respectively. Core and big ticket performance was resilient with both banners weather-impacted and also affected by 10 days of national pension reform strikes. Poland total sales declined 3.3% with LFL down 10.3% (cons. -8.7%). No change to FY24 guidance FY24 guidance was reiterated which is that management is comfortable with company-compiled consensus PBT of £634m (INVe £630m). Consensus for FY25 PBT is £695m. Trading has improved since April according to management as some pent-up demand is coming through. Q2 to date LFL sales fell 1%, with a negative ‘Coronation effect’ of 0.4% Reiterate HOLD Valuation (CY24E PE of 8.9x and a DPS yield of 5.4%) is not particularly demanding at this point in the cycle. Kingfisher is in a robust financial position with a strong balance sheet and continues to buy back shares. However, in our view, the shares are unlikely to perform until investors are prepared to look through the weak consumer environment, inflationary pressures and higher interest rates.