Kingfisher H1 Earnings Call Highlights

Kingfisher raised its full-year outlook after adjusted first-half pre-tax profit rose 9.9% to £404 million, supported by gross-margin gains and £44 million in structural cost savings. Full-year profit guidance increased to £595 million–£635 million, while free-cash-flow guidance rose to £480 million–£520 million. Trade and digital operations continued to outperform: trade sales rose 16% excluding Screwfix, e-commerce sales increased 16%, and marketplace GMV jumped 42%, contributing more than £13 million in retail profit. Screwfix led U.K. performance with 5.6% like-for-like sales growth. Performance remained mixed across markets, with stronger results in Poland and Iberia offsetting pressure at B&Q, Brico Dépôt and bathroom categories. Kingfisher is responding with store transformations, new lower-priced bathroom ranges and continued investment in marketplace and trade capabilities.

Kingfisher LON: KGF reported higher first-half profit and upgraded its full-year outlook, citing gross-margin gains, cost discipline and continued growth in trade, e-commerce and marketplace operations despite mixed conditions across its home-improvement markets. Adjusted pre-tax profit rose 9.9% to £404 million in the first half, while sales including marketplace gross merchandise sales increased 1.6%. Adjusted earnings per share increased 16%, and free cash flow totaled £339 million after investment in strategic priorities, Chief Financial Officer Bhavesh Mistry said.

The company raised its full-year adjusted pre-tax profit guidance to £595 million to £635 million, an increase of £20 million at the midpoint. It also lifted expected free cash flow by £20 million to a range of £480 million to £520 million. Chief Executive Officer Thierry Garnier said the company’s strategy was gaining momentum, particularly at Screwfix and in its trade, digital and marketplace businesses. “We are building a stronger, more resilient Kingfisher,” Garnier said.

Mistry said gross-margin performance and structural cost reductions more than offset £48 million of operating-cost inflation, including two months of higher U.K. national insurance contributions. Gross margin contributed £40 million in the period, supported by group buying and sourcing, marketplace and retail-media growth, foreign-exchange tailwinds and the prior-year disposal of the Romania business. The company delivered £44 million of structural cost reductions through distribution-center space optimization, procurement efficiencies and store operating-model improvements. Mistry said Kingfisher continued to see opportunities from sourcing, marketplace, retail media, supply-chain optimization and productivity measures across stores and central functions.

Kingfisher returned £333 million to shareholders through dividends and share buybacks during the half. It declared an interim dividend of 3.8 pence per share, unchanged from a year earlier, and said it expects to complete £175 million of its £300 million share-buyback program by the end of December. Net leverage stood at 1.4 times, while adjusted EBITDA was £784 million. The company spent £171 million on capital expenditures, including nine new stores, technology and product ranges.

Group trade sales reached £2.1 billion and increased 16% excluding Screwfix. Trade penetration rose by more than 3 percentage points to 31% of sales. Kingfisher said it had trade zones in 49% of stores outside Screwfix and had enrolled 438 trade sales partners across its banners. Garnier said the company could eventually have one or two trade sales partners in every store, while also seeking to raise sales ge...