reports
- Jaime Katz
Morningstar | Garner Set to Take the Reins at No-Moat Kingfisher; Shar...
No-moat Kingfisher announced on June 26 that Thierry Garner will succeed CEO Veronique Laury by the end of September 2019. We have a favorable opinion of Garner, who has spent the past two decades in senior roles at Carrefour (a French multi-national retailer). His experience leading the Carrefour Asian business since 2012 and specializing in digital and e-commerce sales fits well with the current Kingfisher corporate strategy of shifting to smaller format stores and emphasizing digital channels...
- Jaime Katz
Garner Set to Take the Reins at No-Moat Kingfisher; Shares Remain Unde...
No-moat Kingfisher announced on June 26 that Thierry Garner will succeed CEO Veronique Laury by the end of September 2019. We have a favorable opinion of Garner, who has spent the past two decades in senior roles at Carrefour (a French multi-national retailer). His experience leading the Carrefour Asian business since 2012 and specializing in digital and e-commerce sales fits well with the current Kingfisher corporate strategy of shifting to smaller format stores and emphasizing digital channels...
- Jaime Katz
Morningstar | Inconsistent Results Persist at No-Moat Kingfisher; Shar...
No-moat Kingfisher’s fiscal 2020 first-quarter sales update revealed disparate performance across regions, with strength in the U.K., but struggles in France. Overall sales for the first quarter grew 0.3%, ahead of our full - year forecast for a 5% decline (which includes locations set to be closed accounting for 6% of 2019 sales). While the sales update did not provide explicit detail on margins, we expect to hear further insights on new store formats at its innovation day but believe these ...
- Jaime Katz
Inconsistent Results Persist at No-Moat Kingfisher; Shares Undervalued
No-moat Kingfisher’s fiscal 2020 first-quarter sales update revealed disparate performance across regions, with strength in the U.K., but struggles in France. Overall sales for the first quarter grew 0.3%, ahead of our full-year forecast for a 5% decline (which includes locations set to be closed accounting for 6% of 2019 sales). While the sales update did not provide explicit detail on margins, we expect to hear further insights on new store formats at its innovation day but believe these mig...
- Jaime Katz
Morningstar | Competitive Landscape Remains Fierce for Kingfisher, Cha...
Kingfisher has undertaken significant initiatives through its One Kingfisher plan to improve the operating profit profile of a previously siloed business model by unifying the organization. In focusing on a united product offering across regions and brands, an increased digital presence, and the elimination of redundancies in goods not for resale, the firm’s margin and cost profile should be on a modestly improving trajectory despite ongoing struggles in the French market; we model operating m...
- Jaime Katz
Competitive Landscape Remains Fierce for Kingfisher, Challenging Opera...
While no-moat Kingfisher achieved the interim goals of its One Kingfisher plan in 2018, headwinds (wage and cost inflation and weak economic environment in the U.K.) prevented the firm from benefiting from the fruits of its labors. For 2018-19, the firm planned on unifying 40% of its cost of goods sold, which it successfully executed on, exiting the year 50% complete (and now aspires for 70% by the end of 2019-20). It also anticipated it would complete its unified IT rollout and launch e-commerc...
- Jaime Katz
Morningstar | External Headwinds Stall Kingfisher’s Profit Opportuni...
While no-moat Kingfisher achieved the interim goals of its One Kingfisher plan in 2018, headwinds (wage and cost inflation and weak economic environment in the U.K.) prevented the firm from benefiting from the fruits of its labors. For 2018-19, the firm planned on unifying 40% of its cost of goods sold, which it successfully executed on, exiting the year 50% complete (and now aspires for 70% by the end of 2019-20). It also anticipated it would complete its unified IT rollout and launch e-commerc...
- Jaime Katz
External Headwinds Stall Kingfisher’s Profit Opportunities; Shufflin...
While no-moat Kingfisher achieved the interim goals of its One Kingfisher plan in 2018, headwinds (wage and cost inflation and weak economic environment in the U.K.) prevented the firm from benefiting from the fruits of its labors. For 2018-19, the firm planned on unifying 40% of its cost of goods sold, which it successfully executed on, exiting the year 50% complete (and now aspires for 70% by the end of 2019-20). It also anticipated it would complete its unified IT rollout and launch e-commerc...
- Jaime Katz
Morningstar | Lowering Kingfisher Moat Rating to None as Efforts to Un...
We are lowering our economic moat rating for Kingfisher to none from narrow after reassessing the firm’s brand intangible assets and scale, now that the firm is halfway through its five-year One Kingfisher restructuring plan. Our contention is supported by returns on invested capital (including goodwill) that have remained depressed, dropping to 7.1% in 2018 (below our 9% weighted average cost of capital) and averaging 7.3% over the past five years. This in turn has led us to downgrade our ste...
- Jaime Katz
Morningstar | Kingfisher Moat Rating Falls to None as Competition Rema...
Kingfisher has undertaken significant initiatives through its One Kingfisher plan to improve the operating profit profile of a previously siloed business model by unifying the organization. In focusing on a united product offering across regions and brands, an increased digital presence, and the elimination of redundancies in goods not for resale, the firm’s margin and cost profile should be on a modestly improving trajectory despite ongoing struggles in the French market; we model operating m...
- Jaime Katz
Lowering Kingfisher Moat Rating to None as Efforts to Unify Business F...
We are lowering our economic moat rating for Kingfisher to none from narrow after reassessing the firm’s brand intangible assets and scale, now that the firm is halfway through its five-year One Kingfisher restructuring plan. Our contention is supported by returns on invested capital (including goodwill) that have remained depressed, dropping to 7.1% in 2018 (below our 9% weighted average cost of capital) and averaging 7.3% over the past five years. This in turn has led us to downgrade our ste...
- Jaime Katz
Kingfisher Moat Rating Falls to None as Competition Remains Fierce
We don't plan to alter our GBX 300 fair value estimate for narrow-moat Kingfisher after assessing the third-quarter sales update. We view the shares as undervalued. While total sales in constant currency rose 1.2%, in line with our 1.4% outlook for the second half, currency provided some headwinds in the period, leading to reported growth of just 0.2%. The France business (37% of sales) continues to track slightly worse than our more than 1% decline forecast for the second half, with Castorama d...
- Jaime Katz
Morningstar | French Business Continues to Drag on Kingfisher's Profit...
We don't plan to alter our GBX 300 fair value estimate for narrow-moat Kingfisher after assessing the third-quarter sales update. We view the shares as undervalued. While total sales in constant currency rose 1.2%, in line with our 1.4% outlook for the second half, currency provided some headwinds in the period, leading to reported growth of just 0.2%. The France business (37% of sales) continues to track slightly worse than our more than 1% decline forecast for the second half, with Castorama d...
- Jaime Katz
French Business Continues to Drag on Kingfisher's Profits, With Few Si...
We don't plan to alter our GBX 300 fair value estimate for narrow-moat Kingfisher after assessing the third-quarter sales update. We view the shares as undervalued. While total sales in constant currency rose 1.2%, in line with our 1.4% outlook for the second half, currency provided some headwinds in the period, leading to reported growth of just 0.2%. The France business (37% of sales) continues to track slightly worse than our more than 1% decline forecast for the second half, with Castorama d...
- Jaime Katz
Morningstar | Kingfisher struggles to capture expense leverage as Fren...
Kingfisher has undertaken significant initiatives through its One Kingfisher plan to improve the operating profit profile of a previously siloed business model by unifying the organization. In focusing on a united product offering across regions and brands, an increased digital presence, and the elimination of redundancies in goods not for resale, the firm’s margin and cost profile should be on a modestly improving trajectory despite ongoing struggles in the French market; we model operating m...
- Jaime Katz
Kingfisher struggles to capture expense leverage as French sales langu...
Narrow-moat Kingfisher's French business continues to weigh on profits, with Castorama (53% of France sales) sales falling 6% in the first half, hindered by weak brand perception, an evolving retail environment, and flat sales for the home improvement market, according to Banque de France. The U.K. and Ireland segment also showed mixed performance, with B&Q (70% of segment) sales falling 2.3% and Screwfix sales rising 10.4% as the latter brand continues to open locations. This lumpy performa...
- Jaime Katz
Morningstar | Languishing French Business Weighs on Kingfisher's Growt...
Narrow-moat Kingfisher's French business continues to weigh on profits, with Castorama (53% of France sales) sales falling 6% in the first half, hindered by weak brand perception, an evolving retail environment, and flat sales for the home improvement market, according to Banque de France. The U.K. and Ireland segment also showed mixed performance, with B&Q (70% of segment) sales falling 2.3% and Screwfix sales rising 10.4% as the latter brand continues to open locations. This lumpy performance ...
- Jaime Katz
Languishing French Business Weighs on Kingfisher's Growth; Lowering FV...
Narrow-moat Kingfisher's French business continues to weigh on profits, with Castorama (53% of France sales) sales falling 6% in the first half, hindered by weak brand perception, an evolving retail environment, and flat sales for the home improvement market, according to Banque de France. The U.K. and Ireland segment also showed mixed performance, with B&Q (70% of segment) sales falling 2.3% and Screwfix sales rising 10.4% as the latter brand continues to open locations. This lumpy performa...
- Jaime Katz
Morningstar | Kingfisher Reports Mixed Results in Sales Update; One Ki...
Narrow-moat Kingfisher’s fiscal 2019 second-quarter sales update revealed mixed results for the quarter, with strength in the U.K. segment, but struggles at Castorama (21% of 2018 sales) continued. Overall sales for the first half grew 1.2%, near our 2019 expectation of 2.2% growth. While the sales update did not provide explicit detail on margins, the firm said that it anticipates gross margins to expand despite near-term headwinds in the quarter as the One Kingfisher plan continues to be on ...
- Jaime Katz
Kingfisher Reports Mixed Results in Sales Update; One Kingfisher Plan ...
Narrow-moat Kingfisher’s fiscal 2019 second-quarter sales update revealed mixed results for the quarter, with strength in the U.K. segment, but struggles at Castorama (21% of 2018 sales) continued. Overall sales for the first half grew 1.2%, near our 2019 expectation of 2.2% growth. While the sales update did not provide explicit detail on margins, the firm said that it anticipates gross margins to expand despite near-term headwinds in the quarter as the One Kingfisher plan continues to be on ...
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