The shares of Kingfisher plc (LON:KGF) have opened on a low note falling 3.2% in the initial hours of trading with current share price of $294.10 because of the low profit margins and sales reported in the third quarter 2014. According to the management, the primary reason for the drop in sales and profit margins is the adverse foreign-exchange drives.
Kingfisher reported its third quarter 2014 financial results yesterday with net sales of £2.83 billion and retail profit of £225 million. The company witnessed 3.6% drop in its overall sales during the quarter and its profit margins took a hit of £13 million because of converting its overseas profits into sterling.
While talking about the factors responsible for meager results, Ian Cheshire, CEO of Kingfisher plc (LON:KGF), said,
“Trading conditions in our largest and most significant market, France, were particularly difficult and deteriorated across the quarter, impacted by the weak economic backdrop.”
At the same time, he mentioned that sales were on the right track in UK and Irish markets. However, the company was cautious over the outlook and Mr. Cheshire added,
“Overall, we remain cautious on the outlook, especially in France, and continue to focus on margin and cost initiatives to support our performance.”
During the investor meet, Mr. Cheshire announced Veronique Laury as his successor citing her 26 years of experience in the industry. Veronique Laury added,
“With more than 26 years in home improvement, and 11 years at Kingfisher, I know our employees and our businesses well and I understand the reality of our customers’ lives. I look forward to putting my experience to work to build on Sir Ian’s legacy with passion, energy and pace.”
Kingfisher plc (LON:KGF) has four different brands under its management including B&Q, Brico Depot, Castorama, and Screwfix. It has net market capitalization of GBP6.96 billion and the shares of Kingfisher plc (LON:KGF) have dropped 22.75% year-to-date.
This article has been written by Prakash Pandey.