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Kingfisher PLC ADR KGFHY

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Morningstar’s Analysis

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Kingfisher Optimistic on Profit Outlook Despite Decline in Third-Quarter Sales; Shares Fairly Valued

Matthew Donen, CFA Equity Analyst

Analyst Note

| Matthew Donen, CFA |

Demand for no-moat Kingfisher’s do-it-yourself products has been more resilient than management’s expectations despite the second sequential quarter of declining revenue, which is against an exceptionally high comparator. Management expects annual profit to fall in the higher end of its GBP 910 million to GBP 950 million guidance provided last quarter. While this will likely be marginally above our GBP 919 million estimate, our longer-term view remains unchanged. We expect consumer spending to shift away from home improvement and store expansion to moderate. We reiterate our GBX 353 fair value estimate and would require a greater margin of safety before initiating a position.

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Company Profile

Business Description

Kingfisher is a home improvement company with over 1,360 stores in nine countries across Europe. The company operates several retail banners that are focused on trade customers and general do-it-yourself needs. Kingfisher’s main retail brands include B&Q, Screwfix, and TradePoint in the United Kingdom and Castorama and Brico Depot in France. The U.K. and France are Kingfisher’s largest markets, accounting for 81% of sales. The company is the second-largest DIY retailer in Europe, with a leading position in the U.K. and a number-two position in France.

3 Sheldon Square, Paddington
London, W2 6PX, United Kingdom
T +44 2073728008
Sector Consumer Cyclical
Industry Home Improvement Retail
Most Recent Earnings
Fiscal Year End Jan 31, 2022
Stock Type
Employees 79,629