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.