Wickes shares tumble as retailer lowers FY guidance

Shares in home improvement retailer Wickes were sharply lower early on Tuesday after the group downgraded full-year profit guidance and said it remained "watchful" of current macroeconomic conditions as it looks to manage the business "appropriately" amid external pressures.

The retailer now expects adjusted pre-tax profit of £72.0m to £82.0m for the year, down from previous guidance of "no less than £83.0m".

Wickes said like-for-like sales were up 5.4% in the six months ended 26 July, with progression in both core revenues and its delivered 'Do It For Me' unit, resulting in first half like-for-like sales growth of 0.8% against strong prior year comparatives.

The London-listed firm stated its local trade business continued to perform well, benefitting from the company's "market-leading value proposition". However, it also noted that it had seen signs of softening in both its DIY and DIFM markets in recent weeks.

Core LFL sales for the second quarter were down 0.2%, reflecting an improving trend on the first quarter, but Wickes cautioned that the recent slowdown in trading suggested that customers were reacting to the currently uncertain macroeconomic backdrop, leading it to issue full-year adjusted pre-tax profits in the range of £72.0m-82.0m.

Chief executive David Wood said: "Wickes has delivered another strong performance, as the business continues to provide the best value, choice and availability for customers. Our TradePro scheme is expanding with great momentum as tradespeople turn to Wickes for value during a period in which consumers are becoming more price conscious. It is encouraging to see continued outperformance in our core market share despite recent signs of softening in the DIY market. We continue to do a great job engaging DIFM customers as they take a little more time to consider their purchases.

"Our investment for growth progressed in the period with five store refits completed in the first half which continue to drive strong returns. We remain watchful of the macroeconomic backdrop and are managing the business appropriately to navigate these external pressures. We are confident that our uniquely balanced business model and great value offer for customers will enable us to continue to deliver for the benefit of all our stakeholders."

Shares in B&Q parent company Kingfisher and Travis Perkins, from which Wickes was spun-off in April 2021, were also in the red early on Tuesday.

As of 0840 BST, Wickes shares had slumped 16.22% to 141.59p.

Reporting by Iain Gilbert at Sharecast.com