Wickes cuts outlook despite strong second-quarter sales

Wickes cut its full-year forecast after signs of a “softening” in the DIY and DIFM markets in recent weeks, although the company’s LFL sales rose 5.4% in the second quarter.

According to the group, trading in recent weeks suggests customers are reacting to the uncertain macroeconomic backdrop as the brand enters the second half of its financial year. Against this backdrop, Wickes currently expects full-year adjusted PBT to be in the range of £72-82m, against a previous forecast of £83m.

Nevertheless, progress in both underlying revenue and DIFM’s delivered performance led to first-half comparable sales growth of 0.8% versus strong prior-year comparisons.

The company also showed that domestic trade sales performed very strongly, with its TradePro customer base increasing by 60,000 to 690,000 in the first half compared to an increase of 80,000 in FY21. DIY sales remain below last year, and despite activity outpacing Covid levels, the company is seeing signs of a softening in the market.

Wickes said it would continue to manage supply chain inflation, reportedly passing through cash cost increases while maintaining its “leading” pricing position.

DIFM LFL is said to have achieved first-half sales that were 29.7% ahead on a year-on-year basis despite ongoing Covid and supply chain challenges. The company has seen some slowdown in new orders in recent weeks as customers “take longer to commit to big-ticket projects.”

However, conversion reportedly remains good, cancellations remain low and the brand continues to have a strong order book.

David Wood, chief executive of Wickes, said: “Wickes delivered another strong performance as the business continues to deliver the best value, choice and availability for customers. Our TradePro scheme is expanding with great momentum as traders turn to Wickes for value at a time when consumers are becoming increasingly price conscious.

“It’s encouraging to see a continued advance 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.”

He added: “Our growth investment progressed over the period with five store refurbishments completed in the first half which continue to deliver strong returns. We continue to monitor the macroeconomic backdrop and manage the business appropriately to address these external pressures.

“We are confident that our uniquely balanced business model and great customer proposition will allow us to continue to deliver results for the benefit of all our stakeholders.”