FY22 results in-line with expectations For the 12 months to January, Kingfisher reports FY22 underlying PBT of £949m (+20.9%) versus management’s guidance at the top end of £910-950m and INVe £955m. Sales were up 6.8% with LFL sales at constant FX +9.9% or +18.1% on a 2 year basis, with gross margin +30bps to 37.4%. FY22 was a record year for Kingfisher, benefiting from elevated demand for home categories during the pandemic as well as reflecting progress on the implementation of its ‘Powered by Kingfisher’ strategy. Balance sheet remains strong with net leverage of 1x. A 12.4p DPS was declared (+50%) and Kingfisher has completed £225m of its planned £300m share buyback programme. Management is comfortable with FY23 consensus expectations Management is comfortable with current consensus expectations, given heightened macro and geopolitical environment. Company-compiled consensus is for FY23 PBT of £789m vs INVe at £761m. As expected, given commentary from others, Kingfisher has had an encouraging start with Q1 LFL sales down 8.1%, with 2 year LFL +16% Recommendation/forecast/TP put under review Valuation (CY22E PE 10x) appears to reflect the expectation of lower FY23 profits, though given how fast market drivers are changing, uncertainty remains as to what ‘normalised’ future earnings could look like and whether KGF can be a sustainable growth story. Ultimately, KGF is still a big box retailer. The structural challenges from the shift online, the rise of the discounters and the underlying ‘do it for me’ trends have not gone away, in our view.