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Kingfisher Q1 2025/26 trading update preview: can B&Q owner navigate challenging retail landscape?
Home improvement retailer Kingfisher is set to release its first quarter trading update on 28 May, with investors watching for signs of resilience amid mixed consumer spending patterns.
Kingfisher's current market position and expectations
Kingfisher PLC, the parent company of B&Q, Screwfix, Castorama, and Brico Dépôt, is poised to release its first quarter (Q1) 2025/26 trading update on Wednesday, 28 May 2025 amid a complex retail environment characterised by shifting consumer behaviours, macroeconomic pressures, and strategic transformation.
In the previous fiscal year, Kingfisher reported Q1 2024/25 sales of £3.3 billion, marking a 0.3% increase in constant currency terms, though like-for-like (LFL) sales declined by 0.9%. The company maintained its full-year guidance, projecting adjusted pre-tax profits between £490 million and £550 million, and free cash flow ranging from £350 million to £410 million.
For Q1 2025/26, analysts anticipate continued resilience in core categories, bolstered by ongoing digital transformation and trade-focused initiatives. However, challenges such as subdued demand for big-ticket items and economic uncertainties in key markets like France may impact overall performance.
The home improvement sector continues to navigate the aftermath of the pandemic-driven boom, with normalising demand patterns and more cautious consumer spending creating a challenging backdrop for all retailers in the space, including market leader Kingfisher.
UK and Ireland performance expectations
Kingfisher's UK operations, particularly Screwfix and TradePoint, have demonstrated robust performance, with Screwfix achieving a 2.4% LFL sales increase in Q1 2024/25. The company's emphasis on trade customers and e-commerce expansion has been instrumental in driving growth.
The UK home improvement market has shown signs of stabilisation after a period of post-pandemic adjustment. While housing transaction volumes remain subdued due to higher mortgage rates, renovation activity has proven more resilient as homeowners continue to invest in existing properties rather than moving.
Screwfix's trade-focused model has been a particular bright spot, with its convenient click-and-collect service and extensive branch network resonating with professional customers. The planned expansion of this format, including new store openings, will likely feature in the trading update.
B&Q's performance will be closely watched for indications of consumer sentiment around larger home improvement projects. The DIY chain has been reconfiguring its store formats and expanding its marketplace offering to drive improved performance in a competitive market.
French operations and restructuring progress
In France, both Castorama and Brico Dépôt faced challenges, with LFL sales declining by approximately 5% in Q1 2024/25. Kingfisher has initiated structural simplification and leadership changes to address these issues, aiming to enhance performance in this market.
The French home improvement market continues to face headwinds from broader economic challenges, including subdued consumer confidence and housing market weakness. These factors have weighed on Kingfisher's performance in its second-largest market.
Restructuring initiatives at Castorama France, including range optimisation and supply chain improvements, will be under scrutiny in the trading update. Investors will be looking for early signs that these changes are delivering the anticipated benefits.
Brico Dépôt's discount positioning should theoretically be advantageous in the current economic climate, as consumers become increasingly price-sensitive. Any commentary on pricing strategies and customer response will be particularly relevant.
International markets and expansion strategy
Poland and Romania have shown promising trends, with Romania reporting a 14.7% LFL sales increase in Q1 2024/25. These markets are expected to contribute positively to Kingfisher's overall performance, supported by favourable economic conditions and strategic initiatives.
Eastern European operations have provided a growth counterbalance to more mature Western European markets. The continued expansion in these regions demonstrates Kingfisher's commitment to geographical diversification as a growth driver.
The company's international strategy includes potential further expansion into new markets, though with a more measured approach than in previous years. Any updates on market entry plans or partnership opportunities would be significant for long-term growth prospects.
Iberian operations, following the acquisition of Grupo Nuevo Electro, represent another potential growth avenue. Integration progress and performance metrics from this region could feature in the trading update, providing insights into Kingfisher's ability to successfully execute its expansion strategy.
Digital transformation and e-commerce progress
Kingfisher continues to advance its strategic priorities, with e-commerce growth being a central pillar of its transformation agenda. Total e-commerce sales grew by 12.7% in Q1 2024/25, now accounting for 18.8% of group sales.
The B&Q e-commerce marketplace experienced a 99.4% year-over-year (YoY) growth in gross merchandise value, with a successful launch at Castorama France in March 2024. This marketplace strategy has enabled Kingfisher to significantly expand its product range without carrying additional inventory.
Click and collect remains the dominant fulfilment method for online orders, representing approximately 85% of e-commerce sales. This service plays to the company's store network strength while offering convenience for customers who often need products quickly for ongoing projects.
Mobile app engagement and improvements to the digital customer journey have been focus areas, with app-based sales growing faster than overall e-commerce. Updates on app penetration and customer metrics will provide insights into the effectiveness of these digital investments.
Trade customer focus and professional segment
TradePoint achieved an 8.5% LFL sales increase in the most recent financial year, and trade loyalty programs are now active across all banners. The professional segment has become an increasingly important growth driver for Kingfisher across all its operating markets.
The focus on trade customers represents a strategic pivot that leverages the more consistent spending patterns of professionals compared to DIY customers. Trade customers typically spend more frequently and are less sensitive to macroeconomic fluctuations than retail consumers.
Screwfix's continued expansion, with three new stores in France and seven in the UK & Ireland during Q1 2024/25, underscores Kingfisher's commitment to growing its trade-focused footprint. The trading update may include further details on expansion plans for this successful format.
Trade customer initiatives go beyond store openings to include dedicated ranges, enhanced service offerings, and trade credit facilities. Progress in growing trade customer accounts and average transaction values will be key metrics to watch in the update.
Kingfisher analyst ratings
According to LSEG Data & Analytics, 1 analyst has a ‘strong buy’ recommendation for Kingfisher, 2 a ‘buy’, 7 a ‘hold’ and 4 a ‘sell’ with a median long-term upside target at 291.08pp, 4% below its current share price (as of 23/05/2025).
Kingfisher LSEG Data & Analytics chart
Kingfisher has a TipRanks Smart Score of ‘5 Neutral’ and is rated as a ‘hold’ with 1 ’buy’, 5 ‘hold’ and 2 ‘sell’ recommendations (as of 23/05/2025).
Kingfisher TipRanks Smart Score chart
Kingfisher technical analysis
Kingfisher’s share price has risen by around 22% year-to-date, greatly outperforming the FTSE 100's over 5% gain, and is on track for its fourth straight month of gains.
Kingfisher-FTSE 100 comparison chart
The September 2024 peak at 333.5p remains in focus, a rise above which may lead to the May 2021 peak at 389.7p being eyed longer term.
Kingfisher monthly candlestick chart
The area around the March 2023 high at 294.8p may offer support in case of a sell-off being seen following the 28 May trading statement. If fallen through, the May-to-June 2024 and March 2025 highs at 281.6p-to-273.5p may act as a support zone with the 200-to-55-day simple moving averages (SMA) at 273.3p-to-272.2p. Such a decline would represent a near 10% slide from current prices, though.
Kingfisher daily candlestick chart
How to trade Kingfisher shares ahead of the update
For investors considering positions in Kingfisher ahead of the Q1 trading update, several approaches are available through IG's trading and investment platforms.
- Research Kingfisher's recent performance, competitive positioning, and growth strategy to inform your trading decision.
- Consider how consumer spending trends and home improvement market dynamics might impact the company's near-term prospects.
- Open an account with IG by visiting our website and completing the application process.
- Search for 'Kingfisher' or its ticker 'KGF' on our trading platform or app.
- Place your trade, ensuring you have appropriate risk management measures in place given the potential volatility around trading updates.
Spread betting and CFD trading offer ways to potentially profit from both rising and falling share prices. These products allow you to take positions with leverage, though it's important to remember that leverage increases both potential returns and risks.
For those with a longer-term view on Kingfisher's business trajectory, share dealing provides a more straightforward investment approach. This allows you to build a position in a company that has demonstrated resilience through various market cycles.
While the home improvement sector faces headwinds such as high interest rates and cautious consumer spending, Kingfisher's diversified portfolio and strategic initiatives position it to navigate these challenges. The upcoming Q1 2025/26 trading update will provide further insights into the company's progress and its ability to adapt to the evolving retail landscape.
The market's response to the update will likely depend on how Kingfisher's performance compares to expectations and whether management maintains its full-year guidance. Any revisions to outlook, either positive or negative, could drive significant share price movement in the days following the announcement.
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