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Kingfisher PLC KGFHY

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Kingfisher Resumes Dividend on the Back of Strong Full-Year Results but Expects DIY Growth To Slow

Matthew Donen, CFA Equity Analyst

Analyst Note

| Matthew Donen, CFA |

No-moat Kingfisher delivered a stronger-than-expected performance for its full-year results. Outperformance was led by the group’s historically weaker performing chains, such as B&Q and Castorama, which were boosted by impressive online sales growth and the shift toward do-it-yourself, or, DIY activity during the coronavirus pandemic. Kingfisher has continued to see rapid growth during the start of the new financial year, with like-for-like sales up 24% in the first seven weeks, but expects growth to slow as the year progresses due to higher comps and a shift in consumer spending as economies open up. We will incorporate these results and guidance into our model but don’t expect to make a material change to our fair value estimate, with shares currently fairly valued.

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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.

Contact
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

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