Risk to forecasts continues It is hard to find a positive in Kingfisher’s Q3 update, with Group LFL down 3.7%. The new dynamic seems to be weakness in Poland and management is now talking about a weak consumer backdrop in all key markets. In addition, performance continues to be impacted by disruption from the implementation of new ranges, continued adjustment to promotional activity and operational challenges in France. It is early days for Mr Thierry Garnier, having been in the CEO role for just 8 weeks, but he commented that Kingfisher is suffering from organisational complexity and too many large-scale projects. He intends to pause some of these in order to focus on stabilising trading and as a result expects no immediate effect from these changes. Management expects weaker trading to continue into Q4, despite weak French comps from last year’s ‘gilets jaunes’ demonstrations. Valuation does not appear overly demanding, but it is not compelling enough for the execution risk and limited longer-term growth opportunities, in our view. Risk to consensus is on the downside. FX is also starting to move against Kingfisher with sterling’s recent strengthening. We place our forecasts and TP under review. See our note No sign of an inflection point,16 October, for our thoughts on the issues faced. Detail UK & Ireland LFLs were down 1% with B&Q down 3.4% (Bloomberg consensus -3%), impacted by the softer market backdrop with management estimating there was a negative 1.5% impact from the discontinuation of showroom services. Screwfix LFLs were up 3.7% (consensus +4.4%), a slowdown on H1’s run-rate of 4.8%. French LFL sales were down 6.1% with Castorama LFLs down 6% (cons -4.1%) and Brico Depot down 6.1% (cons 6.1%). Performance reflected lower promotional activity and the impact of transformational activities. Milder weather has not helped with the underlying market also being soft. Poland LFL sales were down 3.2% (cons +1.6%), a material change in dynamic from Q2 when LFLs were up 0.9%. This was impacted by new range implementations and the removal of one further Sunday of trading each month earlier this year (management estimates a negative impact of 1%). Management reports a much softer market generally and expects this to continue into Q4. Romania, small in the context of the Group, LFLs +6.1% driven by good performance by the Brico Depot stores with total sales (down 0.6%) impacted by the annualisation of clearance activity in the former Praktiker stores.