Kingfisher sparked hopes that life was returning to the UK's lacklustre do-it-yourself market after sales at B&Q fell by less than feared in the past three months.
The group's shares, which have been under pressure during the worst DIY downturn for more than a decade, rallied 8.25p to 244.75p yesterday.
Gerry Murphy, the chief executive, said there were "early signs of progress" at B&Q, despite unveiling the sixth consecutive quarterly fall in underlying sales at the group's core chain. In the three months to 15 July, like-for-like sales at B&Q fell 2.4 per cent. This represented progress after the 8.8 per cent fall in the previous three months but was helped by weak comparatives during the same period last year.
B&Q managed to hold its gross margin despite discounting its kitchen and bathroom ranges to help drive sales. Total sales at the chain were flat.
Analysts were encouraged by the UK trend but stopped short of lifting their profit forecasts. Most are relying on a sharp recovery in sales at B&Q in the second half to prevent them taking a knife to their figures again.
Mr Murphy said the backdrop of B&Q's progress was a "continuing weak consumer market for home improvement". He said the market "has not yet returned to growth despite a pick-up in general household consumption".
Kingfisher is pushing into the builders' trade market to try to find new sources of revenue growth. Its UK trade businesses increased their like-for-like sales by 15.3 per cent during the quarter.
For once, it was the group's overseas arm that did not live up to expectations. Although the contribution from its French chains and those scattered across eastern Europe and China helped to lift underlying group sales by 1 per cent, sales growth outside the UK slowed. In France, underlying sales at Castorama rose by 0.5 per cent, while at Brico Depot, they climbed 2.5 per cent. Both were weaker than expected.Reuse content