Kingfisher lifts profit outlook as pros keep spending and e-commerce clicks higher

The results and the upgrade

Pros kept building even as DIYers took a breather, and that was enough for Kingfisher to lift its outlook. The home-improvement group now sees adjusted pretax profit landing between £595 million and £635 million, compared with a prior range of £565 million to £625 million. Investors liked it, pushing the shares up as much as 11%.

What did the heavy lifting? A busy Screwfix and solid performances in Poland, Spain and Portugal. Those gains offset weaker demand at B&Q and Brico Dépôt France, with high temperatures reducing store traffic.

The reset comes after many expected a tougher summer as extreme heat and tight household budgets weighed on the sector. UK rivals Topps Tiles and Wickes both missed estimates amid weather-related pressure.

Margins, online and analyst reaction

Comparable sales ticked up 0.1%, matching expectations. Gross margin improved to 38.4%, helped by the company's scale in purchasing and sourcing and by expansion of its online marketplace. Digital kept humming too: e-commerce revenue was up 11% to £1.6 billion, making up 22% of group sales compared with 20% a year earlier.

"Much stronger than expected," is how RBC Capital Markets analyst Richard Chamberlain summed it up. Bloomberg Intelligence's Charles Allen and Darja Lema said the combination of standout trade demand and broad e-commerce reach could lift consensus estimates by about 6%.

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Strategy, risks and shareholder returns

"While the consumer environment remains mixed, our consistent delivery, strategic progress and opportunities ahead give us the confidence to upgrade our guidance," said Chief Executive Officer Thierry Garnier. Looking to UK policy, he added, "For us the number one priority is the business rate," and said he wants a "level playing field between bricks-and-mortar and online players."

Allen and Lema cautioned that the UK's October budget could add cost pressure if wages rise again, while limited fiscal headroom may cap any housing or DIY stimulus. Kingfisher, meanwhile, is targeting trade revenue of more than £5 billion annually in the medium term and is returning cash: a third £50 million share buyback tranche begins this week and is slated to finish by December, after two completed rounds totaling £125 million.

For your money, this is a snapshot of a retailer leaning into resilient trade customers, a bigger online basket, and steady buybacks, with policy and wage costs as the wild cards to watch.

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