Howden Joinery Group H1 Earnings Call Highlights

Howdens said first-half results met expectations and kept its full-year outlook unchanged, with group sales up 3.3% and underlying profit growth outpacing revenue growth. The company also said it remains on track to gain market share despite a challenging market. Profitability improved thanks to pricing, productivity and supply-chain efficiencies, with gross margin up 70 basis points and underlying profit before tax rising 4.3% to GBP 122 million. Howdens also ended the period with GBP 333 million in cash and reiterated its dividend and GBP 100 million buyback plans. The company completed its DIY Kitchens acquisition, expanding into the online, non-trade kitchen market while keeping its core trade-only model unchanged. It continues to invest in depot openings, depot refits and digital tools, while still expecting a broadly flat U.K. kitchen market in 2026.

Howden Joinery Group LON: HWDN said first-half results met its expectations and that its full-year outlook remains unchanged, as the kitchen and joinery supplier reported higher sales, profit growth ahead of revenue and continued investment in its depot network, manufacturing and digital capabilities. Andrew, who led the presentation, said the business “continued to advance on all fronts” despite what he described as a challenging marketplace. Group sales increased 3.3% in the first half, or 3.7% on a trading-day-adjusted basis. He said the number of kitchens sold in the U.K. increased and that the company remains positioned to take market share this year.

At the half year, Howdens had 975 depots trading, including 893 in the U.K. The company said it maintained an industry-leading gross margin, generated strong operating cash flow and retained a robust balance sheet. Management also reiterated plans to return GBP 100 million to shareholders through the buyback program announced in February.

Chief Financial Officer Jackie Callaway said Howdens’ first-half performance demonstrated the resilience of its in-stock, trade-only model. U.K. revenue rose 3.3% to GBP 991 million and increased 2.3% on a same-depot basis. The price increase implemented at the start of the year contributed about 1.6% to sales. International depot revenue was EUR 46 million, up 8.5% on an adjusted basis and 7% higher on a same-depot basis. Callaway said sales in France continued to increase, while depots in the Republic of Ireland traded well. Gross margin was 70 basis points ahead of last year, reflecting the benefit of pricing, productivity, sourcing and manufacturing efficiencies. Underlying EBIT margin was 12.4%, and underlying profit before tax increased 4.3% to GBP 122 million. Underlying earnings per share rose 5.5%, and the underlying effective tax rate was 23%. Callaway said gross profit was GBP 28 million ahead of last year, with price contributing GBP 16 million and volume and mix contributing GBP 12 million. She said the company offset about GBP 8 million of inflationary increases within cost of goods sold during the first half, supported by its near-sourced and vertically integrated supply chain.

Howdens now expects inflationary headwinds of around GBP 40 million across its total cost base in 2026, GBP 10 million higher than previous guidance. Callaway attributed the increase primarily to cost pressures linked to uncertainty in the Middle East, including commodities, labor and property costs. In the first half, the company said it delivered around GBP 19 million of combined cost savings across operating costs and cost of goods sold. Operating cost increases were held to GBP 21 million, including GBP 9 million of investment in strategic initiatives. Those investmen...