Kingfisher, the parent company of B&Q, Screwfix, and Castorama, has issued a profit warning due to bad weather and troubles in Poland. The company now expects to make profits of £590 million, which is £44 million less than anticipated. Last year, Kingfisher reported record profits of £1 billion. As a result of the profit warning, shares in Kingfisher dropped over 10%, benefiting hedge funds with short positions. Sales of outdoor furniture, barbecues, and garden products fell by 27% in the UK due to a washout summer. In Poland, consumer confidence has declined significantly, impacting Kingfisher's stores in the country.
Lockdown Sales Boom Coming to an End
The drop in Kingfisher's share price signifies a potential end to its lockdown sales boom. The company has seen strong sales in the UK, with consumers defying the gloom and purchasing new kitchens and bathrooms. This trend is attributed to the high cost of moving due to expensive mortgage rates. Kingfisher is also expanding its Screwfix speedy delivery service and online marketplace, DIY.com, to drive further sales growth.
'Gloomy Tuesday' Brings More Profit Warnings
KINGFISHER wasn't the only company to issue a profit warning on "gloomy Tuesday." Quiz, a struggling fashion retailer, saw its shares plunge by a third after sales slumped by 12%. SafeStyle, a door and windows company, experienced a 40% drop in its value due to declining sales. Software training company Northcoders also faced nearly a 40% decline in share price. Naked Wines saw a 7% decrease after announcing that sales would fall by 12% as consumers reduce their online orders. These warnings indicate cracks in the corporate world, according to AJ Bell's Russ Mould.
Avanti to Continue Running West Coast Trainline
Despite causing chaos with numerous train cancellations last year, Avanti has been awarded a new contract by the Department for Transport to operate services between London, Manchester, and Glasgow for the next nine years. Avanti faced the threat of contract termination due to driver shortages causing one in four trains to be cancelled. However, the Department for Transport justified renewing the contract, citing dramatically reduced cancellations. Transport Secretary Mark Harper stated that Avanti's contract renewal ensures long-term certainty for both the operator and passengers. Labour MP Mike Amesbury criticized the decision, suggesting that Avanti was rewarded for being "a little less crap" than before.
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