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Kingfisher PLC KGF Stock Quote

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Morningstar‘s Stock Analysis KGF

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Kingfisher’s 1H Results Largely in Line but Guidance Lowered; We Reduce Our Fair Value Estimate

Matthew Donen, CFA Equity Analyst

Analyst Note

| Matthew Donen, CFA |

No-moat Kingfisher’s first-half results were broadly in line with our expectations. Sales declined by 4.1% during the first half of the year against a tough comparative period, which remains 16.6% above prepandemic levels. Retail profit declined 27% to GBP 555 million, falling slightly short of company-compiled consensus of GBP 563 million. With the consumer becoming increasingly stretched, management lowered its profit before tax guidance to between GBP 730 million and GBP 770 million. We reduce our fair value estimate to GBX 330 from GBX 353, as we revise our average profit before tax margin to 5.7% from 6.1%, which better resembles more normalized profitability. We anticipate that the current buildup in inventory will require further promotional activity, as consumers cut back on discretionary spending and thereby reducing profitability. Shares remain undervalued.

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Key Statistics KGF

Company Profile KGF

Business Description

Kingfisher is a home improvement company with over 1,470 stores in eight 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
Industry Home Improvement Retail
Most Recent Earnings
Fiscal Year End Jan 31, 2023
Employees 79,629