Despite a cost-of-living crisis that is eating into household budgets, British home improvement retailer Kingfisher reported a 29.5% drop in first-half profit.

CEO Thierry Garnier told reporters that, with the exception of outdoor, sales in all product categories had returned to positive like-for-like growth in the previous week.

“When we look at customer demand we don’t see major changes that could show clearly the impacts (of) cost of living,” he said, noting customers were not massively trading down to entry priced ranges or to private label products.

He stated that demand for ‘big ticket’ categories such as kitchens and bathrooms was strong, while sales of insulation products had increased as consumers sought to save money on their energy bills.

“Overall, we see a pretty resilient sales trend,” he said.

Despite this, shares in Kingfisher, which owns B&Q and Screwfix in the United Kingdom as well as Castorama and Brico Depot in France and other markets, were down 5.5% at 0849 GMT on concerns about the year’s outlook.

In the six months to July 31, Kingfisher made an adjusted pretax profit of 472 million pounds ($539 million), slightly ahead of analysts’ average forecast and compared to a COVID-19 boost of 669 million pounds a year earlier.

Total sales fell 2.8 per cent in constant currency to 6.81 billion pounds, while comparable sales fell 4.1 per cent after rising 22.8 per cent in the previous year. The company claimed to have gained market share.

It stated that third-quarter trading was consistent with its adjusted pretax profit guidance of approximately 770 million pounds for 2022-23.

So far in the third quarter, like-for-like sales are down 0.7% year on year but up 15.2% year on year.

However, Kingfisher has run several trading scenarios to account for the possibility of a more volatile economic environment.

Profits of 730-770 million pounds are expected, down from 949 million pounds in 2021-22.

(Adapted from Nasdaq.com)