By Andrea Figueras
Shares in Kingfisher plunged after the U.K. group unveiled profit expectations for its fiscal year 2026 that missed analysts' projections amid higher costs in France and its home market.
The stock was down 11% at 248.0 pence in early morning European trading, leading the FTSE-100 index fallers. Shares are currently 0.4% lower over the year to date.
The home-improvement company anticipates adjusted pretax profit--its preferred metric, which strips out exceptional and other one-off items--between 480 million pounds and 540 million pounds ($620.4 million-$697.9 million) for the year ending January.
The midpoint is 6% below consensus expectations, RBC Capital Markets analysts Richard Chamberlain and Manjari Dhar said in a note. Analysts were guiding for adjusted pretax profit of 543 million pounds, according to a poll of estimates provided by the company.
At this point of the year, the company is relatively cautious on its prospects due to the current market scenario, Chief Executive Thierry Garnier said during a call after results.
"The recent government budgets in the U.K. and France have raised costs for retailers and impacted consumer sentiment in the near term," the CEO noted. The group had anticipated a hit of around 45 million pounds to retail profit in fiscal 2026 due to higher national insurance contributions in the U.K. and potential tax changes in France.
Despite this, the company should be able to mitigate entirely the additional costs, Garnier said, adding that some cost-reduction measures include efficiencies in the supply chain, lease negotiations, space optimization and staff productivity.
Deutsche Bank analysts had expected a conservative guidance, after Bhavesh Mistry took over the role of chief financial officer in January, replacing Bernard Bot, who retired.
Write to Andrea Figueras at andrea.figueras@wsj.com
(END) Dow Jones Newswires
March 25, 2025 05:57 ET (09:57 GMT)
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