1 May
2024
Wickes Group plc - Trading
Update for the 16 weeks to 20 April 2024
Solid start to the year in
Retail; challenging market conditions continue in Design &
Installation
Profit outlook for the year
remains unchanged
The start
of 2024 has seen a continuation of trends from the fourth quarter
last year and those highlighted at our recent full year results,
with volume growth in Retail1 and a decline in Design
& Installation2. Overall Group LFL sales for the
first 16 weeks were down by 4.2% compared to the same period last
year, with both reporting periods including Easter
trading.
Retail
sales have demonstrated the continued appeal of Wickes' great value
and service-led proposition. LFL sales were up 0.6% in the period,
with a fourth consecutive quarter of positive LFL growth. Market
share has also continued to grow. With selling prices in mild
deflation, the growth in Retail sales has been driven by volume
with an increased number of transactions. TradePro sales continue
to perform strongly, up 12% in the period, reflecting healthy order
books for local trade professionals and continued growth in the
customer base, which grew by a further 57,000 members. DIY
sales remain in moderate decline overall; customers continue to be
enthusiastic about home improvement but are focusing on smaller
projects. Building on this trend we have shown a strong performance
in our decorative categories with interior paint sales up 13%
year-on-year.
Design
& Installation delivered sales3 declined by 18.2%,
reflecting a particularly strong performance in the comparative
period for the prior year, when we were still benefiting from an
elevated order book. Ordered sales4 so far in 2024
have been in single-digit year-on-year decline, with strong
conversion rates partially offsetting a double digit decline in new
leads, as the market for larger ticket purchases remains
challenging.
Our
increased focus on our lower-priced Wickes Lifestyle
Kitchens5 range continues to deliver strong results with
sales in this range up 25% versus the same period last
year.
We continue
to focus on tight cost management throughout the business. In
addition to planned productivity initiatives, we will deliver cost
savings in Design & Installation as a result of, and to help
offset, the lower sales volumes currently being
experienced.
Investment
in our strategic growth levers continues, with our first new store
of the year opening in Long Eaton in March and with two refits
completed in Ashford and Burgess Hill.
Whilst the
trading environment remains uncertain, given the solid start to the
year in Retail and our continued focus on costs, the overall
outlook for adjusted profit before tax for 2024 remains
unchanged.
We will
hold an investor insight event in London on 16 May, focused on
TradePro, and will make presentation materials available on our
website after the event.
David Wood, Chief Executive
of Wickes, commented:
"In the first few weeks of
2024 we have been encouraged that DIYers and local trade
professionals continue to turn to Wickes as a brand they trust for
great value and service and as a result we have once again grown
market share. Although the market for larger ticket items
remains subdued, we have seen strong sales growth in our Wickes
Lifestyle Kitchens, which match customer demand for quality with
great value.
"While the external
environment remains uncertain, our overall profit expectations for
the full year remain unchanged. Looking ahead, we continue to
invest for future growth with our programme of store refits, new
store openings and investment in both technology and Solar Fast,
building an even stronger Wickes for the future."
Enquiries
About Wickes
Wickes is a digitally-led, service-enabled home improvement
retailer, delivering choice, convenience, value and best-in-class
service to customers across the United Kingdom, making it well
placed to outperform its growing markets. In response to gradual
structural shifts in its markets over recent years, Wickes has a
balanced business focusing on three key customer journeys -
TradePro, DIY (together reported as Retail) and our project-based
Design & Installation division.
Wickes operates from its network of 230 right-sized stores,
which support nationwide fulfilment from convenient locations
throughout the United Kingdom, and through its digital channels
including its website, TradePro mobile app for trade members, and
Wickes DIY app. These digital channels allow customers to research
and order an extended range of Wickes products and services,
arrange virtual and in-person design consultations, and organise
convenient Home Delivery or Click-and-Collect.
Footnotes
1) Retail
refers to the revenue stream formerly described as Core.
Retail revenue relates to products sold directly to customers (both
DIY and local trade), in stores or online.
2) Design
& Installation refers to the revenue stream formerly described
as DIFM or Do-it-for-me. Design & Installation revenue
relates to projects such as kitchens and bathrooms, sold by our
showroom Design Consultants. Revenue is recognised when
delivery and installation (where applicable) is
complete.
3) Delivered
sales refers to the revenue which is recognised when the Group has
satisfied its performance obligation to the customer and the
customer has obtained control of the goods or services being
transferred.
4) Ordered
sales refers to the value of orders at the point when the order has
been agreed.
5) Sales of
Wickes Lifestyle Kitchens which include a design element are
classified as Design & Installation revenues, whereas Self
Serve purchases of the Wickes Lifestyle Kitchen range are
classified as Retail revenues.