Wickes reports weaker sales, warns of ‘uncertain’ economic environment

– Like-for-like sales decreased 0.6% in the first 20 weeks of the fiscal year

– Retailer added over 40,000 customers to TradePro program

– DIY specialist faces economic uncertainty and an inflationary headwind

home improvement retailer Wickes (WIX) warned it was facing an ‘uncertain macroeconomic environment’, the kit-kitchen garden furniture supplier reported a 0.6% drop in like-for-like sales for the 20 weeks to May 21, 2022 in a context of normalization of DIY demand after Covid .

Shares of the DIY goods specialist fell 0.3% to 192.8p as the cautious outlook overshadowed the news. Trading has been in line with expectations year to date, giving management the confidence to reaffirm its full year guidance.

ROBUST COMPONENTS

In a brief trading update, Wickes reported a 0.6% drop in like-for-like group sales for the first 20 weeks of the financial year as the retailer beat tough benchmarks.

Like-for-like sales jumped 46% in the first 21 weeks of 2021 as the company capitalized on the pandemic-induced DIY boom.

Nonetheless, CEO David Wood stressed his charge had “continued momentum” and made “a promising start to the year where we continue to take market share.”

Significantly, Wickes sales remain ‘significantly’ ahead of pre-lockdown levels; on a three-year basis, which compares to the pre-Covid period, the group’s total sales were ahead by 22.4% over the 20-week period.

Like many companies, Wickes has to deal with inflation and insisted it is “managing this responsibly while maintaining our price leadership position”.

Wickes’ trade client order books remain at record highs and participation in its TradePro program remains “strong”, with more than 40,000 additional clients year-to-date.

UNCERTAIN CONTEXT

“Our goal remains to provide our customers with the products and services they need at a great price,” added Wood.

“Our commitment to exceptional value has proven particularly effective with our local business customers, who continue to turn to us at a time when their own order books are at record highs.

“Looking ahead, while remaining cognizant of the uncertain macroeconomic environment, we remain confident in the opportunities for Wickes in the large and growing home improvement market.”

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Date of issue: May 26, 2022