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Highlights
- Wickes' retail division posted a 4.2% LFL sales increase in 3Q 2024, driven by strong market share gains and volume growth.
- The TradePro program saw a 16% year-on-year increase in sales, with active members growing to 564,000.
- While D&I sales declined by 13.3% LFL, the business is showing signs of stabilisation, with Solar Fast contributing to growth.
Wickes (LSE:WIX) has released its third-quarter trading update for 2024, reporting robust sales performance and continued market share growth despite a challenging economic environment. The company’s retail division delivered strong growth, while its Design & Installation (D&I) segment is showing signs of stabilisation.
Key Highlights from Q3 2024:
- Group Revenue Growth: Wickes reported an overall revenue increase of 2.1% compared to the same period in 2023, with like-for-like (LFL) sales up by 0.4%.
- Retail Growth: Retail sales rose 4.2% on a LFL basis, driven by strong market share gains and volume growth. Sales benefitted from pent-up demand for outdoor projects, which were delayed due to poor weather in earlier months.
- TradePro Performance: The TradePro membership program continues to perform exceptionally well, with sales up 16% year-on-year and the number of active members growing by 18%, reaching a total of 564,000.
- Design & Installation Stabilisation: While D&I sales saw a LFL decline of 13.3%, the rate of decline has slowed, indicating a stabilising trend. Solar Fast, part of the company’s D&I segment, contributed positively to overall growth, helping to offset challenges in larger ticket sales.
Retail Sales Drive Market Share Gains
Wickes’ retail division has been the standout performer in Q3, with LFL sales increasing by 4.2%. The company attributes this growth to its value-focused and service-led proposition, which has resonated well with customers in the current economic climate. Notably, volume growth was a key driver, as customers responded positively to competitive pricing, despite selling price deflation of around 2%.
Outdoor project sales saw a boost in Q3, as customers caught up on work delayed earlier in the year due to wet weather in the spring and summer. However, Wickes anticipates that this pent-up demand will ease in Q4.
Within retail, Wickes’ TradePro program, which targets local trade professionals, continues to be a significant contributor to growth. TradePro sales were up 16% year-on-year, as the program helped professionals save time and money. The number of active TradePro members has grown by 18% year-on-year to 564,000, further solidifying Wickes’ appeal to this key customer base.
On the other hand, DIY sales have seen a moderate decline, with customers focusing on smaller-scale home improvement projects as larger, discretionary spending remains under pressure.
Design & Installation Shows Signs of Stabilisation
While Wickes’ Design & Installation (D&I) division remains under pressure, with LFL sales declining by 13.3%, the rate of decline has slowed. This segment, which includes larger, high-ticket purchases such as kitchen and bathroom installations, has been impacted by broader economic conditions and reduced consumer confidence. However, recent weeks have shown more stability in ordered sales, suggesting that the worst of the decline may be over.
Wickes also noted the contribution of Solar Fast, a new addition to the D&I portfolio, which delivered a full quarter of sales in Q3. The inclusion of Solar Fast in the D&I business accounts for the difference between total revenue growth and LFL revenue growth in the quarter.
Investment in Strategic Growth
Wickes continues to invest in its long-term growth strategy, opening its third new store of the year in Aberdeen in August 2024. Additionally, the company has refitted two more stores, bringing the total number of stores in the new format to 79% of its estate. This investment positions Wickes for accelerated growth once market conditions improve.
Outlook for Q4 and Beyond
Despite the current challenges, Wickes remains confident in its strategy and ability to deliver on market expectations for adjusted profit before tax for 2024. The company’s strong market share gains and consistent execution of its growth strategy position it well for faster growth as the market improves. Wickes expects to report its Q4 trading update in late January 2025.
