Customers shy away from big ticket purchases, Wickes says
- The home improvement store was previously owned by Travis Perkins
- Wickes like-for-like sales fell 4.2% in the 16 weeks ended April 20
Wickes reiterated its annual guidance even as sales fell during the first months of 2024 due to weaker demand for high-end items.
The home improvement store, which Travis Perkins previously owned, said like-for-like sales fell 4.2 percent in the 16 weeks ended April 20.
Revenue from the design and installation business fell 18.2 percent, following a comparative performance last year, when the company benefited from a stronger order book.
Home decoration store Wickes reiterated its annual expectations, even as sales fell during the first months of 2024
Wickes noted that the market for high-end purchases “remains challenging” as it has been impacted by interest rate increases and cost of living pressures over the past year.
Still, the group achieved sales growth in its retail arm for the fourth consecutive quarter, which increased by 0.6 percent as higher transaction volumes offset ‘mild deflation’ in sales prices.
The TradePro discount program for professionals added another 57,000 members and saw a 12 percent increase in sales.
In addition, Wickes saw a 13 percent increase in interior paint sales and a 25 percent increase in orders for its lifestyle kitchen ranges.
Following the result, the Watford-based company has maintained its full-year guidance. In March, Wickes said it was ‘comfortable’ with the consensus forecast of £43.6 million in adjusted pre-tax profits.
David Wood, CEO, commented: ‘While the external environment remains uncertain, our overall full-year earnings guidance remains unchanged.’
Like many DIY retailers, Wickes has enjoyed booming trade during much of the Covid-19 pandemic as restrictions forced Brits to spend more time indoors.
Demand has also been boosted by cheaper mortgages, a temporary cut in stamp duty, the accumulation of excess savings and a growing desire among Britons to live in larger properties.
Trading has leveled off since the end of the lockdown and the Bank of England began raising rates to tame inflation, escalating mortgage costs.
Last year, Wickes’ like-for-like sales fell 0.3 percent, while profits after counting investments in software-as-a-service fell 31 percent to £52 million.
However, profits exceeded expectations and the company maintained a total dividend payout of 7.9 pence per share.
Wickes Group shares were 1.8 percent lower at 143p on Wednesday afternoon.