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Kingfisher: Poor Weather Hits Sales, but Guidance Unchanged

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Securities In This Article
Kingfisher PLC
(KGF)

No-moat Kingfisher KGF 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.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Matthew Donen, CFA

Equity Analyst
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Matthew Donen, CFA, is an equity analyst for Morningstar Holland BV, a wholly-owned subsidiary of Morningstar, Inc. He covers European industrials and is a member of the Morningstar Economic Moat committee.

Before joining Morningstar in 2020, Donen spent more than two years at Nedgroup Investments in Cape Town, South Africa, where he was a generalist international-equity analyst focused on U.K.- and U.S.-listed stocks.

Donen holds a bachelor's degree in finance and accounting from the University of Cape Town. He holds the Chartered Financial Analyst® designation and is a Chartered Accountant, completing his articles at Ernst & Young in Cape Town, South Africa.

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