By Geoffrey Smith
Investing.com -- Kingfisher (LON:KGF) stock rose by mid-morning in London on Monday after the home improvement group reported a strong first quarter to its fiscal year, helping to ease concerns that the end of the pandemic and soaring prices are hurting the sector.
The owner of B&Q, Screwfix and France's Castorama announced another 300 million pounds ($378 million) in stock buybacks and reiterated its guidance for the year through January 2023, after saying that sales through April were up 16% from pre-pandemic levels.
"Demand remains resilient and trading in all banners and across all customer segments...is in line with our expectations," the company said.
By 05:25 AM ET (0925 GMT), Kingfisher stock was up 2.2%, making it one of the best performers in the FTSE 100 index. It's still down 25% this year, however, caught in the global market downdraft and hurt by the squeeze of tax hikes and energy prices on consumers in its main market, the U.K.
There was clear evidence that the extraordinary surge in business caused by the pandemic was fading. Comparable sales were down 5.4% from a year earlier and were down by around 16% in the U.K. and Ireland, where the group generates half its business. The company made significant gains in market share in France, even though sales at Brico Depot and Castorama fell by 3.7%. That decline was also offset by its other European operations, where they rose 37%, thanks to a gain of over 50% in Poland.
Kingfisher said its "good momentum" had continued so far in the current quarter. In the first half of May, comparable sales were down only 2.5% from last year's exceptional levels, and 1 percentage point of that decline was due to the timing of Easter.
The group also moved to reassure investors on two key points that have caused much concern during the current earnings season, saying that it "continues to manage inflation pressures well" and that it had "good product availability."
Kingfisher's news struck an upbeat note that contrasted with the earnings of many U.S. retailers last week, albeit in the U.S., too, home improvement stores such as Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) fared better than other specialist and department store names.