Retail earnings boost Wickes as the DIY retailer maintains full-year guidance despite concerns over inflation-related consumer spending cuts
- The hardware store parted ways with Travis Perkins 13 months ago
- Wickes saw core sales fall 7.2%, but Do It For Me sales rose 30.4%
- Trading at the firm has slowed as Covid-related travel restrictions were eased
Wickes has reiterated its full-year outlook thanks to continued record orders from local trade customers and strong growth in Fitting Services.
The home improvement retailer, which spun off from Travis Perkins 13 months ago, added that it continued to gain market share despite robust comparative performance last year.
Trade has slowed as Covid-related travel restrictions have eased, but Wickes said total revenue for the first 20 weeks of the current fiscal year was down only slightly from the same period in 2021 and was in line with forecasts.
Slight decline: Home improvement retailer Wickes said total sales for the first 20 weeks of the current fiscal year fell only slightly from the same period in 2021
Core sales were down 7.2 percent, but the impact was limited by the number of new TradePro program customers, which is up over 40,000 so far this year.
Commercial consumer order books remained at their highest level ever.
The decline in core business sales offset 30.4 percent sales growth in the group’s Do It For Me (DIFM) business, which benefited from strong winter demand and an above-average number of orders late last year.
Still, the boom in home renovations over the past two years meant that the Northampton-based company’s total revenue between January and 21 May was 22.4 per cent above pre-Covid volume.
Chief Executive David Wood said the results were “a testament to the strength of our uniquely balanced business – across retail, DIY and DIFM”.
The UK DIY sector has seen booming trade since 2020 in the wake of a pandemic that has seen Brits spend more time indoors and accelerated the rise of hybrid work.
Demand was also boosted by low mortgage rates, a temporary stamp duty exemption, excess savings being built up by Britons and a growing desire among homebuyers to live in more spacious properties.
Boom time: The UK DIY sector has been experiencing a thriving trade since 2020 as a result of a pandemic that has resulted in Brits spending more time indoors
There are concerns within the industry that the current supply chain headwinds and deepening cost-of-living crisis could cause a major setback in trade.
However, Wickes claimed to have managed price increases in its core business “responsibly” and still expects delivered sales in its DIFM business to exceed pre-pandemic levels.
His boss David Wood said: ‘Looking ahead, whilst remaining aware of the uncertain macroeconomic environment, we remain confident of what Wickes has to offer in the large and growing home improvement market.’
Analysts at Investec and Peel Hunt have both maintained their buy ratings for the company, which they estimate will generate nearly £1.6 billion in revenue this year and underlying earnings of around £220 million.
Wickes Group shares closed Wednesday’s trading up 2.5 percent at 198.1 pence, although its value has fallen by more than a quarter over the past 12 months.
Retail sales boost Wickes as the DIY retailer maintains full-year guidance
Source link Retail sales boost Wickes as the DIY retailer maintains full-year guidance