Kingfisher PLC (KGFHF) (H1 2027) Earnings Call Highlights: Profit Jumps 9.9% as Guidance Upgraded

Release Date: September 22, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Adjusted profit before tax increased 9.9% to GBP404 million, driven by strong gross margin performance and disciplined cost control.

• Screwfix delivered outstanding like-for-like sales growth of 5.6%, significantly outperforming the market, with volume-led growth and a successful rewards program.

• Marketplace GMV grew 42%, contributing over GBP13 million of retail profit, with further potential from cross-border trade and increased take rates.

• Trade sales reached GBP2.1 billion and grew 16% excluding Screwfix, with trade penetration increasing to 31% of sales, supported by trade zones and sales partners.

• Full-year adjusted profit before tax guidance upgraded to GBP595-635 million, and free cash flow guidance increased to GBP480-520 million, reflecting confidence in continued performance.

Negative Points

• Big ticket categories, particularly bathrooms, underperformed the market, with the bathroom market remaining challenging across geographies.

• Brico Depot France like-for-like sales declined 4.2%, impacted by weaker demand for building materials and temporary disruption from a new website implementation.

• UK core sales were weak, down 2.7%, due to a soft market, adverse weather effects, and a shift to online purchases impacting store footfall.

• Operating cost inflation of GBP48 million, including increased national insurance contributions in the UK, partially offset profit growth.

• Supplier inflation and freight headwinds are expected to pressure gross margin in the second half, with some non-repeating benefits from FX and Romania disposal not recurring.

Q & A Highlights

Q: Richard Chamberlain (RBC) asked about the scaling of trade sales partners and how to think about the number of partners and the percentage of sales they could generate. A: CEO Thierry Garnier explained that growth will come from both adding more trade sales partners and increasing sales per partner. He stated that in the medium term, they could have one to two trade sales partners in every store. He emphasized that sales per partner is a critical KPI, and they are actively managing performance through new bonuses, specific software for tracking VIP customers, and training. He believes there are "a few years of growth ahead" with this combination.

Q: Izabel Dobreva (Morgan Stanley) asked for more detail on the bathroom range review, specifically what is changing in the offering and if they offer a full project service like they do for kitchens. A: CEO Thierry Garnier responded that the changes include new colors, new designs, and better prices, such as the new Imandra 2 collection which offers the same quality for a cheaper price. He noted they already have a relatively full service with in-store designers, 3D design software, installation, and credit options. The rollout of new ranges will be a step-by-step process across their banners, starting with Castorama France.

Q: Tim Ramskill (Bank of America) asked about the medium-term recovery potential for profit margin in Poland, given its historically higher profitability. A: CEO Thierry Garnier stated that while he doesn't think margins will return to pre-COVID levels (above 10%), he agrees that the profit margin will improve. He expects Poland to improve its profit margin in the coming years, driven by better top-line sales and the actions being taken.

Q: Kate Calvert (Investec) asked for an update on the opportunity for further working capital reduction and what "good" might look like. A: CFO Bhavesh Mistry stated that working capital was well controlled in H1 and there is "a lot still to go after." He noted they are far from best-in-class in inventory and will continue to focus on structural actions, having already taken about nine days of stock out over the last three years. He also mentioned payment terms as another area of focus.

Q: Richard Chamberlain (RBC) asked about the gross margin outlook for the second half, given the strong performance in H1. A: CFO Bhavesh Mistry explained that the H1 gross margin was driven by structural actions like group buying and sourcing, marketplace profitability, and retail media, plus some FX tailwinds. He reminded that about 10 of the 70 basis points of improvement came from the disposal of Romania last year, which won't repeat. For H2, he expects the same structural actions to continue, but they are watching for some supplier inflation and price increase requests, which they will mitigate.

Q: Izabel Dobreva (Morgan Stanley) asked about the profitability ramp-up for marketplaces in France and Poland compared to the UK's early stages. A: CEO Thierry Garnier explained that profitability is a function of sales growth, fixed costs, and marketing investment. He noted that marketing costs typically start around 10% of sales and decrease to around 3% in the long run. He also mentioned that increasing take rates (currently 10-15%) by offering more services to vendors, like retail media and fulfillment, is a key lever for future profit growth.

Q: Yashraj Rajani (UBS) asked about the performance of Screwfix and if the strong like-for-like growth is a good representation of current trading in Q3. A: CEO Thierry Garnier stated he is "relatively optimistic for Screwfix in H2." He noted that the peak season for Screwfix is from September to the end of November, and they are well-prepared. He also mentioned that they will anniversary the launch of the Rewards loyalty program in early October but is confident in their plan for the peak season, including Black Friday.

Q: Arthur Peel (Berenberg) asked about the operating cost environment for H2, particularly with the national insurance headwinds annualizing out. A: CFO Bhavesh Mistry confirmed that structural cost reductions remain a strong focus. He reminded that last year they had GBP145 million of headwinds from national insurance and social taxes, which they mitigated through structural actions. He stated that an "ongoing engine of structural cost initiatives" will continue, including distribution center rationalization, operating model changes, and procurement efficiencies.

Q: Kate Calvert (Investec) asked for a timeline on when the Screwfix France business might become profitable. A: CEO Thierry Garnier explained that the focus is not on the fixed costs but on the sales density and maturation of stores to reach breakeven. He is very encouraged by the performance of early cohorts, which are still growing at around 40% like-for-like after four years. He stated they will be patient and wait for a "reasonable number of stores" to reach profitability before pressing the button on a more significant expansion, which could eventually be 600 stores.

Q: Mia Strauss (BNP Paribas) asked about sourcing conditions for 2027 and if they are doing any pre-buying on oil derivatives. A: CEO Thierry Garnier stated that with about half of sales being private label, they have long-term relationships with vendors, allowing them to plan in advance. He expects some raw material increases to come through into 2027 but is confident they will be manageable due to strong partnerships. He also noted they are well-hedged on energy for the current year and have annual contracts for freight with fuel-linked inflation clauses.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .