Strong sales continue, benefiting from essential status Q4 Group LFL sales (year-end January) were up 16.9% to 9th January, having been up 12.6% to 14th November. This compares to Q3’s +17.4%. Strongest performance was in the UK (Nov LFL sales +24%; Dec +20.8%). France (Nov -0.1% LFL sales; Dec +29.4%) was impacted by a negative calendar effect in November (-5% impact in LFL sales), the closure of certain ranges in store in November and weaker trade trends versus DIY. French sales also benefitted from stronger growth in both formats post November lockdown. Polish LFL sales were up 0.2% in November and +9.7% in December. Management comfortable with top-end of consensus expectations Management is comfortable with the top end of consensus expectations, with a range of £667m to £742m (average £700m – company complied), which compares with our £683m. We place our forecasts/TP under review Reiterate Sell The big unknown is what level of demand will be sustainable going into 2021 as Kingfisher has been fortunate to be classified as essential. We expect a deteriorating macro environment to put pressure on discretionary spending as will a switch-back in spending to leisure pursuits assuming COVID restrictions are lifted as the vaccines are rolled out. We suspect demand has been pulled forward, and, consequently, we believe Kingfisher will not be able to match FY21’s strong performance. A sales drop back is likely to cause some operational de-leverage. There will also be a cost headwind as management has guided to £85m of temporary savings, net of COVID-related costs. A potentially stronger GBP/EUR post the EU trade deal could have a negative translational profit impact (KGF has enjoyed a cumulative £83m currency benefit since the Brexit vote). Ultimately, Kingfisher is still a big box retailer and the structural challenges from the shift online, rise of the discounters and the underlying ‘do it for me’ trend, have not gone away. There is much still to fix at Kingfisher and we struggle to see where sustainable medium-term growth will come from.