Kingfisher plunges after quarterly update

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Kingfisher plunges after quarterly update
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The share price of FTSE 100 retail outfit Kingfisher (LON:KGF) has dropped by 6.54% to 195.15p (as of 12:05 GMT) after revenues fell by 3.1% for the quarter ended by 31st October. Screwfix sales were up, but B&Q and overseas performance fell back significantly. Management said that they still expect gross margin percentage after clearance to be flat.

CEO Thierry Garnier commented: “In my first eight weeks at Kingfisher I have immersed myself in our operations, listened to colleagues, visited stores and met with our customers and suppliers. I am proud to be leading a Group with strong assets, excellent market positions, differentiated business models and strong brands. I have also been encouraged by the commitment of our colleagues, and by proof of product innovation.

“However, it is clear that there is much to do to improve our performance. Kingfisher’s trading during Q3 was disappointing. My early assessment is that we have not found the right balance between getting the benefits of Group scale and staying close to local markets. We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel. Altogether, this has brought disruption to sales and has distracted the business from focusing on customers. In addition, we faced softer market conditions in our main markets during the period“.

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