UK's Wickes sees sales pick up as customers chase value

By Raechel Thankam Job and Neeshita Beura

Sept 15 (Reuters) - UK home improvement retailer Wickes  said on Tuesday sales picked up sharply in the third quarter following a subdued first half, as value-seeking customers helped the company expand market share, sending its shares 8% higher.

High interest rates and broader economic uncertainty have weighed on consumer confidence and big-ticket spending, but Wickes said its value-led model continued to help it outperform the market.

Wickes said retail like-for-like revenue growth accelerated to mid-single digits in the third quarter so far as it sold more goods despite lower prices. It said decorative, gardening and timber products performed well.

CFO Mark George said the retailer's priority was price leadership. "We aim to be 2 to 3% cheaper on a basket than our key competitors," he told analysts, adding that profit growth would come from volume rather than fatter margins.

Wickes' first-half revenue rose just 2.1% year-on-year to £865.3 million ($1.17 billion), held back by wet weather earlier in the year and softer pricing.

Its TradePro trade loyalty scheme was a key driver, with sales up 5% in the first half as tradespeople hunted for better deals.

COSTS OUTPACE FALLING PRICES

For the 26 weeks to 27 June, adjusted profit before tax rose 1.1% to £27.6 million, with productivity actions partially mitigating cost inflation.

George warned that cost inflation had made the softer pricing "clearly very challenging," but added that prices should turn inflationary in the fourth quarter, easing some of that pressure.

On energy, George noted the group has about 50% of its energy costs hedged into 2027, offering some protection against volatile energy markets tied to the Iran war.

Wickes said it remained on track to meet consensus expectations of around 10% growth in 2026 adjusted pretax profit.

Analysts at Panmure Liberum said the guidance looked achievable but tight, given the significant second-half catch-up needed to hit full-year consensus of £54.6 million.

($1 = 0.7423 pounds)

(Reporting by Raechel Thankam Job and Neeshita Beura in Bengaluru; Editing by Eileen Soreng)