Kingfisher: Poor Weather Hits Sales, but Guidance Unchanged

No-moat Kingfisher reported a 3.3% decline in like-for-like sales during the first quarter as poor weather in the U.K. and France resulted in less demand for its seasonal outdoor and garden products. Trading has sequentially improved in May (down 1.1%) compared with April, supported by an improvement in weather conditions and thus we reiterate our GBX 310 fair value estimate, which incorporates an estimated full-year sales decline of 1%. Management has kept its full-year profit-before-tax guidance unchanged, which implies a 16% drop against last year. Shares appear undervalued.