Howdens warns of profit hit from consumer spending slowdown

The appetite of Britain’s householders for a new fitted kitchen has long been considered an unofficial economic barometer. The latest update from Howden Joinery suggests the consumer is wobbling.
The FTSE 100 company, which supplies kitchens, joinery products and hardware to small builders, said that trading in the months since its half-year results had been challenging, characterised by “weak consumer spending, further compounded by uncertainty surrounding the autumn budget”.
Because of this slowdown, Howdens has warned shareholders that pre-tax profits this year are likely to be at the lower end of consensus guidance of £328 million and £350 million.
The company said profitability at these levels was supported by the market share gains it has made and its cost-savings programme.
The group said that total like-for-like sales had fallen 1.9 per cent between mid-June and the end of October, with sales in the UK down 2.2 per cent. Overseas sales were up 9.4 per cent. In the year to date, like-for-like sales have inched up 0.2 per cent across the whole group.
Andrew Livingston, chief executive, said: “Howdens has delivered another strong period of market outperformance in continued challenging conditions, underlining the strength of our trade-only, in-stock business model.”
Livingston said he expected the near-term market outlook into the next year to “remain challenging, in the absence of any meaningful change in the underlying consumer sentiment”.
He is confident, however, that its business model is the right one to address opportunities in its markets and believes the group is on track “to make excellent progress over the medium term”.
The London-based company has estimated that the increase in employers’ national insurance contributions, together with the rise in the national minimum wage, will cost the company about £18 million a year.
Howdens was founded in 1995 by Matthew Ingle and provides trade customers with products available from depots across the UK, France and Belgium. Ingle retired from the business in 2018 and was succeeded as chief executive by Livingston.
The shares were down 6p, or 0.7 per cent, to 841½p.