Kingfisher's Quiet Upgrade: Trade, Marketplace and Screwfix Carry the Day
Structural margin and cash gains lift guidance even as big-ticket demand and bathrooms stay weak — the strategy is doing the work, not the market.
KGF.L · Earnings Call · 2026-09-22
Kingfisher's Quiet Upgrade: Trade, Marketplace and Screwfix Carry the Day
The upgrade nobody saw coming
Kingfisher's H1 2026-27 results delivered a familiar narrative with one important twist: guidance went up. Adjusted profit before tax rose 9.9% to GBP 404 million, and management raised full-year adjusted PBT guidance to GBP 595-635 million, a GBP 20 million increase at the midpoint. Free cash flow guidance was lifted similarly to GBP 480-520 million.
We are upgrading our adjusted profit before tax guidance to a range of GBP 595 million to GBP 635 million, an increase of GBP 20 million at the midpoint.
The upgrade is not built on heroic top-line assumptions. Total sales grew just 1.6% in a mixed market, and core sales were underpinned by resilient repair and maintenance categories while big-ticket remained weak. Strip out a GBP 14 million business rates refund, and profit growth was a still-solid 6.1%. The real driver is structural: gross margin added GBP 40 million, and structural cost reductions delivered GBP 44 million, more than offsetting GBP 48 million of operating cost inflation, including two months of higher U.K. national insurance contributions. Bhavesh Mistry was careful to flag that roughly 10 of the 70 basis points of gross margin expansion came from the disposal of Romania last year, a one-off that won't repeat in H2. “I'd remind you that about 10 of the 70 bps was our sale of Romania last year. So you won't see that in the second half.” — Bhavesh Mistry, Chief Financial Officer · 2026-09-22
Trade sales partners: the new KPI to watch
The most notable new keyword in Kingfisher's latest quarter is trade sales partner, which jumped to the top of the company's keyword ranking. This is not marketing fluff. Group trade sales reached GBP 2.1 billion, up 16% excluding Screwfix, and trade penetration rose more than 3 percentage points to 31% of sales. Dedicated trade zones now exist in 49% of stores, and 58% of stores host a trade sales partner—438 colleagues in total. Sales from customers covered by a trade sales partner grew 23%, helping TradePoint gain share in a subdued U.K. trade market. Management sees this as the number one lever to keep taking share: “if I draw few years from now, you could have 1 to 2 trade sales partner in every store in the medium term.” — Thierry Dominique Garnier, Chief Executive Officer · 2026-09-22 Critically, the focus is not just headcount but sales per partner, with new software and bonuses to manage the best and worst performers. For a retailer that already flagged a 15% share of wallet in Screwfix and just a few percent in the big boxes, the runway is long. “Screwfix, our estimate is around 15%, 1-5. So for our trade business, you could say it's still relatively low.” — Thierry Dominique Garnier, Chief Executive Officer · 2026-03-24
Marketplace, Retail Media and the digital flywheel
Kingfisher's digital ecosystem continues to scale. E-commerce sales reached GBP 1.6 billion, up 16% excluding Screwfix, with penetration at 22% and a medium-term target of 30%. Marketplace GMV grew 42%, representing 18% of e-commerce sales and contributing more than GBP 13 million of retail profit—more than the entire prior year. B&Q Marketplace now offers close to 5 million SKUs. The cross-border opportunity is significant: Kingfisher has onboarded more than 80 international merchants, but they account for less than 10% of GMV, whereas mature marketplaces generate 70% of their business with cross-border trade. Retail Media grew 75% in the half, and management is layering on natural language search with Google and AI-driven content generation via its Fabric platform. The digital flywheel is also supporting the core: marketplace traffic brings new customers to diy.com, and roughly half of B&Q marketplace customers are new to the site.
Screwfix France and the patient path to profitability
Screwfix France remains a multi-year growth option, not a near-term profit driver. Store like-for-like sales increased 48%, and cohorts opened three to four years ago are still growing at plus 39%. Trade penetration is around 55%, and the network will reach 37 stores by the end of H2. But management is deliberately holding back on scaling to 600 stores until the economics are proven. As Bhavesh Mistry put it, “we are not solving for store count. We're solving for economics.” — Bhavesh Mistry, Chief Financial Officer · 2026-09-22 That discipline echoes the prior March call, when Thierry Garnier said, “it is fair to say that in the coming three years, we would expect a loss at Screwfix France.” — Thierry Garnier, Chief Executive Officer · 2024-03-25 The difference now is that the cohort data is stronger and store-level sales density is improving, giving management confidence that the eventual expansion button can be pressed. The same patience applies to franchise conversions in France, where early economics are encouraging but only three stores have been transferred so far.
Weather, bathrooms and the mixed consumer
The results also lay bare the volatility of home improvement demand. Summer heat waves made it harder for customers to undertake larger projects such as building works, tiling and painting, pressuring core sales, while driving strong demand for cooling and outdoor leisure products. In France, Brico Depot like-for-like sales fell 4.2%, partly due to temporary customer experience disruption from a new website, though trade sales grew 21%. Castorama France returned to like-for-like growth in Q2—a fourth consecutive quarter of sequential improvement—supported by revamped stores and range reviews. Poland was the standout: total sales up 3.6%, retail profit up 15.7%, and retail margin up 60 basis points. The weak spot is big ticket categories, particularly bathrooms, where Kingfisher's ranges underperformed the market. Thierry Garnier was blunt: “Not happy with bathroom. I think the market is a bit softer than kitchen. But overall, we are not happy with ourselves.” — Thierry Dominique Garnier, Chief Executive Officer · 2026-09-22 The response is the new Imandra 2 bathroom range—new colors and design at a cheaper price point—rolling out first in France, then Poland and B&Q. It will take months to change showrooms, so any turnaround is a fiscal 2027 story.
The bottom line
Kingfisher is not a glamorous story. The global tape is obsessed with AI data centers, and the company's home improvement retail niche barely registers in the market's top momentum movers. But the H1 results show a company executing a structural margin and cash-generation playbook while navigating a genuinely mixed consumer environment. The guidance upgrade is justified by cost and margin delivery, not by a sudden demand recovery. The risks are clear: bathroom ranges are uncompetitive, big-ticket demand remains soft, weather can swing quarterly sales, and France still needs a market recovery to hit medium-term margin targets. Yet with trade, marketplace, retail media, and Screwfix France all contributing to a virtuous cycle, Kingfisher looks more resilient than its end markets. For investors willing to look through the noise, the quiet upgrade is worth noting.