翠丰集团（KGF）：过热-下调评级至减持（包括第一季度销售预览）

Restricted - External KGF.L/KGF LNUNDERWEIGHTfrom Equal WeightEuropean General RetailNEUTRALUnchangedPrice TargetGBp 280raised 2% from GBp 275Price (19-May-25)GBp 314Potential Upside/Downside-10.7%Source: Bloomberg, Barclays ResearchMarket Cap (GBP mn)5590Shares Outstanding (mn)1783.15Free Float (%)99.9452 Wk Avg Daily Volume (mn)4.9Dividend Yield (%)3.96Return on Equity TTM (%)2.86Current BVPS (GBp)353Source: BloombergPrice PerformanceExchange-LSE52 Week rangeGBP 3.32-2.27Source: IDCLink to Barclays Live for interactive chartingEuropean General RetailJames Anstead+44 (0)20 3134 6166james.anstead@barclays.comBarclays, UKMatthew Clements+44 (0)20 7773 6018matthew.clements@barclays.comBarclays, UKImogen Doyle+44 (0)20 7773 2605imogen.doyle@barclays.comBarclays, UK •Of all the companies under our coverage, Kingfisher's share price is arguably the mostimpacted by macro expectations. Although UK interest rates have come down in 2025, thishas happened amid a deteriorating macro outlook.With a TSR of >25% YTD (vs FTSE100 +5.9%), Kingfisher is the second strongest performing stockin our General Retail coverage. (NEXT has generated a TSR of >30% but has upgraded itsguidance twice already, amid strong sales growth.) Kingfisher is now trading on a 25/26 PE of14.6x and its one-year forward multiple is as high as it has been in the last five years (see Figure10). Its current year FCF yield of c8% is arguably still attractive, but is well below where it hasstood at times in the recent past.Looking at our General Retail coverage, we see better value opportunities at B&M (OW, PT 400p)and M&S (OW, PT 430p), while we see NEXT (EW, PT 11,900p) and Inditex (EW, PT €46) asofferingmore reliable growth opportunities.We note short positioning in Kingfisher, albeit still high, is less crowded than it has been inrecent years (e.g short interest as a percent of free float -37% in the last three months accordingto Hazeltree data). In theory, this leaves the stock less vulnerable to a "short squeeze".KGF.L: Financial and Valuation Metrics EPS (GBp)FY Jan20242025202620272028EPS21.6A20.4A21.0E24.3E28.1EPrevious EPS21.6A20.4A20.8E24.0E27.4EConsensus EPS22.0A20.0A21.3E25.1E28.6EP/E14.515.315.012.911.2Consensus numbers are from Bloomberg received on 19-May-2025; 12:50 GMTSource: Barclays Research 2 FIGURE 1. Kingfisher – LFL sales growth, 21/22-25/26ENB: the consensus numbers we cite in this report are taken from Kingfisher's website – the company notes that the information was "correct as at 12 May 2025".Source: Company data, Barclays Research estimatesKingfisher – 1Q25/26 previewKingfisher will report 1Q25/26 sales on 28 May, covering the three months to 30 April. Weforecast group LFL sales at -0.4% - compared with company-collected consensus of -0.7%.We expect no changes to PBT/FCF guidance at this early stage in the year.Group sales growth - what do we already know?In a break with recent tradition, Kingfisher did not provide any current trading update forFebruary and March when it reported its FY24/25 results on 25 March.•Calendar impacts.The key technical point to note is the extra leap year day in February2024. Given Kingfisher reports calendar quarters rather than 13-week periods, this means onefewer day's worth of sales will be included within 1Q25/26's LFL sales number. Kingfishernoted that the leap year benefited LFL sales in 1Q24/25 by +1.1ppts, broadly what one wouldhave expected based on 90 days rather than the standard 89. Kingfisher guided in March for a1Q25/26 calendareffectof -0.8ppts, comprising a reversal of the 1.1ppts 2024 leap yearimpact and a small (+0.3ppts) benefit from the wider calendarshiftof trading days. This isfactored into all our divisional sales forecasts. Although Easter was later in 2025 than 2024, inboth years it was well within the quarter and thus we do not expect any impact on that front.•Comp base.How do the comps look? Our starting point for forecasts is the fact thatKingfisher reported group LFL sales -0.8% in 4Q24/25, or -0.1% when adjusting for calendareffects.Looking at the sequential comps, we find that group LFL sales went from -4.3% in4Q23/24 to -0.9% in 1Q24/25. However, the improvement was flattered by the leap yearbenefit and other calendareffects,as the LFL sales in 1Q24/25 was -2.8% excluding calendareffects.In other words, the comps appear to get slightly tougher between 4Q and 1Q. 4 20 May 2025 Taking these points into account, we think that it is reasonable to expect a group LFL salesdecline of -0.4%, or +0.4% excluding calendar impact.Other than sales - what do we expect to learn?Beyond the specific sales figures, our expectations are broadly as follows:•Guidance – we do not expect any change at this stage.In March Kingfisher issued FY25/26guidance for adjusted PBT of c£480-540m and FCF of c£420-480m. Kingfisher also set out thehome improvement market assumptions underpinning this guidance range:°the low-case assumes flat industry sales in the UK & ROI, low-to-mid single digit