* Q3 underlying sales fall 3.6 pct in France
* UK & Ireland underlying sales up 5.8 pct
* Shares fall up to 3 pct
(Adds CEO quote, analyst comment, shares)
By James Davey
LONDON, Nov 22 Kingfisher, Europe's
largest home improvement retailer, said sales growth slowed in
its third quarter, with a soft French market offsetting a robust
performance in Britain and Poland where trading conditions are
Shares in the firm, which trades as Castorama and Brico
Depot in markets including France and B&Q and Screwfix in
Britain, fell up to 3 percent on Tuesday after it reported
underlying sales in France fell 3.6 percent in the three months
to Oct. 31, its fiscal third quarter.
Kingfisher blamed France's weak economy and a reduction in
promotional activity at Castorama for the outcome.
"France will now have now seen like-for-like sales decline
for five years by the end of the current year, even without the
incursion of large scale online (competitors) in the DIY
market," said Tony Shiret, analyst at Haitong Research, who has
a "sell" rating on Kingfisher.
The group's performance in France contrasted with the
outcome in Britain and Ireland, where like-for-like sales
increased 5.8 percent, driven by a 12.7 percent rise at Screwfix
that reflected well received new and extended ranges.
B&Q's like-for-like sales were up 3.5 percent - a sixth
straight quarter of growth.
Sales in Poland rose 6.7 percent, benefiting from supportive
market conditions, including a rise in state benefits.
Kingfisher has not seen any clear impact on UK demand since
Britain voted to leave the European Union in June.
In January Chief Executive Véronique Laury detailed a
strategy to boost Kingfisher's annual profit by 500 million
pounds from 2021 that will cost 800 million pounds over five
years to deliver.
The plan involves unifying the product ranges offer across
the business, improving e-commerce capabilities and driving
efficiencies. The company is the world's third largest home
improvement company behind U.S. firms Lowe's and Home
"We continue to make good progress...and remain on track,"
Total group sales rose 11.5 percent to 3.0 billion pounds
($3.7 billion), with like-for-like sales up 1.8 percent, slowing
from growth of 3.0 percent in the previous quarter.
The firm also plans to return 600 million pounds to
shareholders over the next three years through share buybacks.
It has so far returned 182 million pounds.
For Kingfisher's 2016-17 year analysts are on average
forecasting an underlying pretax profit of 773 million pounds
versus 686 million pounds in 2015-16.
Shares in Kingfisher, up 12 percent so far this year, were
down 8.6 pence at 361 pence at 0946 GMT, valuing the business at
8 billion pounds.
($1 = 0.8011 pounds)
(Editing by Kate Holton/Keith Weir)