Kingfisher (LON:KGF) executives said the home improvement group delivered a “strong year” as it gained market share across its major banners, expanded profit margins despite cost inflation, and generated more than £500 million of free cash flow, enabling another £300 million share buyback alongside a flat dividend.
Full-year results: sales growth, margin expansion, and cash generation
For the year, Kingfisher reported group sales of £12.9 billion, with like-for-like sales up 1.4% (excluding a -0.3% calendar impact). Adjusted profit before tax was £560 million, up 6%, while adjusted earnings per share rose 15% to 23.8 pence, supported by earnings growth and a 6% uplift from the completed share buyback program.
Kingfisher highlighted 80 basis points of gross margin expansion in the year, attributing the improvement to group buying and sourcing benefits, marketplace and retail media (both described as gross-margin accretive), logistics efficiencies, and a foreign exchange tailwind. Retail operating margin expanded 30 basis points to 5.7%.
Banner performance: UK strength, France in a weak market, Iberia growth
In the UK, B&Q posted total sales growth of 3.9%, or 5.9% including marketplace gross merchandise sales (GMS). Like-for-like sales grew 3.3%, which management said significantly outperformed a flat market and pushed market share to record levels. Big Ticket grew 6% and Seasonal was up 30% in Q1, helped by favorable weather that the company said it will “lap” in the current year.
Executives said B&Q benefited from the transfer of customers from Homebase after Homebase entered administration, and Kingfisher acquired eight former Homebase stores which were opened in time for peak trading. TradePoint sales increased 5.2%, and B&Q e-commerce rose 21.5%, supported by marketplace growth. Management said B&Q’s marketplace is gross-margin accretive and generated £15 million of profit in the year.
Screwfix also outperformed, with total sales up 4.5% and like-for-like sales up 3.2%. The chain opened 27 stores on a net basis during the year, with management pointing to marketing and promotional execution, competitive pricing, range improvements, and app-driven rewards initiatives as key contributors.
Overall, UK banners delivered £575 million of retail operating profit, representing 78% of group retail profit. Profit rose 2.9% year-over-year, or 9.4% excluding last year’s B&Q business rates refund. Management noted significant cost headwinds from wage increases, higher national insurance contributions, and extended producer responsibility (EPR) packaging fees.
In France, management described a “subdued consumer backdrop,” with the home improvement market down about 3% for the year. Castorama’s like-for-like sales were down 2.2% during what executives described as a year of significant change and store restructuring. Brico Dépôt reported total sales down 1.8% and like-for-like sales down 2.3%, but improved price positioning by two points and delivered trade sales growth of 26%, with trade penetration rising to 17%.
France delivered £97 million of retail operating profit, with a 2.5% margin that increased 10 basis points year-over-year. Management said both banners offset sales deleverage and higher social charges through gross margin expansion and structural cost reductions.
In Poland, Castorama’s like-for-like sales fell 1.1% for the year, with management citing unfavorable weather and political uncertainty early in the year, followed by a better Q4 that returned to growth. Poland generated £87 million of retail operating profit (about 12% of group retail profit) and took a one-off impairment of about £5 million tied to accelerated technology investment in legacy systems. Executives said e-commerce sales in Poland rose 30% year-over-year, aided by the January 2025 marketplace launch.
Iberia delivered like-for-like growth of 8.8%, which management said outperformed a growing market, driven by competitive pricing and “strong progress” in trade.
Strategy update: trade growth, digital ecosystem, marketplace scaling, and AI
Management emphasized trade as a core growth driver, describing it as revenue and margin accretive at the retail operating profit level and supported by the existing store footprint with little to no incremental CapEx. Trade sales grew 23% across the group, and trade customers now represent “one in every 3 pounds” of group sales. Screwfix trade penetration stands at 75%.
Given the pace of progress, Kingfisher updated its medium-term ambition to target £5 billion of group sales from trade customers. Initiatives cited included expanding dedicated trade space, increasing the number of trade sales partners (279 enrolled across banners, about three times last year), and the continued development of loyalty programs. Screwfix reported 2.2 million active rewards customers, with 41% of e-commerce sales coming via its app.
On digital, management said one out of five pounds in group sales now comes from e-commerce, with a medium-term target of 30% penetration, one-third of which would come from marketplaces. Executives highlighted that 94% of first-party (1P) online orders are picked in-store, positioning stores as the center of fulfillment for click-and-collect and home delivery.
Marketplaces were a central focus, with the group reporting marketplace GMV of £518 million, up 58% year-over-year. Management said B&Q’s marketplace, launched in 2022, has reached a cumulative £1 billion in GMV since launch, with 2,800 vendors and 3.7 million SKUs. Executives also said B&Q has introduced in-store click-and-collect for marketplace items and that stores accept marketplace returns, which they said drives additional footfall. They added that marketplaces in France and Iberia have reached breakeven “early in their journey.”
In Q&A, management pointed to cross-border vendors as a significant next phase of marketplace growth, noting that cross-border represents only a few percent of B&Q marketplace vendors today versus roughly 50% at mature pure-play marketplaces. Executives described cross-border primarily as a “choice” and range opportunity rather than a pure pricing lever.
Kingfisher also discussed retail media and data monetization. The company said it has built an insight platform, Core IQ, in Castorama France and plans to roll it out across all banners in 2026. Management said it targets retail media revenue equivalent to 3% of e-commerce sales, with “significant drop through to profit,” and noted pilots of advertising on in-store digital screens.
On AI, executives cited the performance of its in-house agent “Hello Casto,” saying customer visits increased more than 60% and conversion rose 95%. Kingfisher also announced a partnership with Google Cloud to introduce AI-powered search across banner websites and apps and said it has worked to enable AI agents to discover products and transact autonomously when functionality becomes available in the UK and Europe.
Capital returns and outlook: another buyback and profit guidance range
Kingfisher said it completed a £300 million share buyback in March and announced a fifth £300 million buyback program. The group also proposed a dividend of 12.4 pence per share, in line with last year. Management said it has returned £2.4 billion to shareholders over the past five years, equivalent to about 40% of its market capitalization.
Looking ahead to fiscal 2026/27, management guided to adjusted profit before tax of £565 million to £625 million and free cash flow of £450 million to £510 million, citing a “mixed consumer environment.” Executives said they remain mindful of heightened macroeconomic and geopolitical uncertainty, but estimated the in-year direct impact from energy and freight costs was limited based on what they knew at the time, noting energy costs are less than 1% of sales and mostly hedged, while freight is a small proportion of cost of goods sold and typically covered by annual contracts.
Management reiterated its focus on continuing to grow sales ahead of its markets, profit ahead of sales, and generating strong free cash flow, while maintaining discipline on pricing, margins, and costs.
About Kingfisher (LON:KGF)
Kingfisher plc is an international home improvement company with over 1,800 stores, supported by a team of c.73,000 colleagues. We operate in seven countries across Europe under retail banners including B&Q, Castorama, Brico Dépôt, Screwfix, TradePoint and Koçta?. We offer home improvement products and services to consumers and trade professionals who shop in our stores and via our e-commerce channels.
