Wesfarmers Limited today announced its retail sales results for the third quarter of the 2018 financial year, reporting a hit from Bunnings UK and Ireland (BUKI) due to adverse weather conditions.
Managing Director Rob Scott said the sales performance of the Group’s retail divisions was pleasing, with most businesses demonstrating improved sales momentum in the quarter.
However "for Bunnings United Kingdom and Ireland (BUKI), better execution and improved trading results in the early part of the quarter were offset by unusually poor weather in March 2018, resulting in a decline in total sales of 6.5 per cent (13.5 per cent in local currency terms) for the quarter," Mr Scott said.
Total sales for the quarter were £211 million, a decrease of 13.5% on the prior corresponding period (a decrease of 6.5% to $374 million). Store-on-store sales decreased 15.4%. For the financial year to date, total sales decreased 14.7% to £726 million (decreased 12.9% to $1,245 million), while store-on-store sales decreased 13.9%.
Improved trading results in the early part of the first quarter were offset by the Beast from the East which caused severe weather conditions in March that significantly affected trading, particularly in the seasonal gardening and outdoor living categories.
Bunnings Group managing director Michael Schneider said satisfactory progress has been made in regards to the focused streams of work to improve performance in Homebase stores as well as in continuing to refine performance in the Bunnings stores. This has included greater focus on store standards, inventory controls, range management and improved promotional and digital initiatives.
"Retail execution standards lifted in Homebase in preparation for spring and stores are well-positioned for the arrival of the season," Mr Schneider said. "Refinement of the Bunnings format is ongoing with recent conversions reflecting updated range plans."
During the quarter, eight pilot stores were opened and seven stores closed (four for conversion, three permanently). There were 227 Homebase stores and 23 Bunnings stores as at 31 March 2018. Speculation around Wesfarmers' possible exit from the UK continues, with the company working with financial investment bank Lazard and BCG on various options, with many suggestions leading to the company potentially selling the Homebase chain to a UK buyer.