Wickes downgrades outlook despite strong Q2 sales

Wickes has downgraded its full-year outlook after signs of “softening” in DIY and DIFM markets in recent weeks, despite the company’s LFL sales growing by 5.4% in its 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. Given this backdrop, Wickes currently expects full year adjusted PBT to be in the range of £72-82m, against a prior forecast of £83m.

Nonetheless, progression in both core revenue and delivered DIFM performance resulted in first half like-for-like sales being up 0.8% against strong prior year comparatives. 

The company also showed that local trade sales performed very strongly, with its TradePro customer base increasing by 60,000 to 690,000 during the first half compared to the increase of 80,000 in FY21. DIY sales remain below last year and in spite of activity being ahead of Covid levels, the company has seen signs of the market softening. 

Wickes said it will continue to manage supply chain inflation by reportedly passing through cash cost increases while maintaining its “leading” price position. 

DIFM LFL is said to have delivered sales in the first half that were 29.7% ahead on a one year basis, despite ongoing Covid and supply chain challenges. The company has seen some slowing of new orders in recent weeks, as customers are “taking longer to commit to big ticket projects”. 

However, it is reported that conversion remains good, cancellations remain low, and the brand continues to have a strong order book.

David Wood, CEO of Wickes, said: “Wickes has delivered another strong performance, as the business continues to provide the best value, choice and availability for customers. Our TradePro scheme is expanding with great momentum as tradespeople turn to Wickes for value during a period in which consumers are becoming more price conscious. 

“It is encouraging to see continued outperformance 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 investment for growth progressed in the period with five store refits completed in the first half which continue to drive strong returns. We remain watchful of the macroeconomic backdrop and are managing the business appropriately to navigate these external pressures. 

“We are confident that our uniquely balanced business model and great value offer for customers will enable us to continue to deliver for the benefit of all our stakeholders.”