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By James Davey
LONDON, Nov 24 (Reuters) - Kingfisher, Europe'slargest home improvement retailer, missed forecasts with a near7 percent fall in quarterly profit, as a soft market in Franceand currency movements offset a robust performance in Britain,where the economy is stronger.
Shares in the group, which trades as Castorama and BricoDepot in France, its most profitable market, and B&Q andScrewfix in Britain, fell by up to 3.3 percent on Tuesday.
Kingfisher "clearly expects current subdued levels of trade(in France) to continue against a market expectation of a slightimprovement," said Haitong Research analyst Tony Shiret, who hasa "sell" stance on the stock.
He reckons consensus expectations for full 2015-16 yearpretax profit, 681 million pounds ($1 billion) before theupdate, will fall by about 10 million pounds.
Kingfisher, the world's No. 3 do-it-yourself (DIY) playerbehind U.S. companies Lowe's and Home Depot, madea retail profit of 223 million pounds ($338 million) in the 13weeks to Oct. 31, its fiscal third quarter.
That was below analysts' average forecast of 234 millionpounds, according to a company-compiled consensus, and down 6.6percent from the same period last year.
The shortfall reflected a France trading profit miss ofabout 9 million pounds.
Kingfisher was also hit by 17 million pounds of adverseforeign exchange movements on the translation of non-sterlingprofits and around 5 million pounds of additional storedevelopment costs in France and Poland compared with last year.
"Trading conditions have followed a similar trend to thefirst half...reflecting the more encouraging macroeconomicbackdrop in the UK offset by a softer market in France," saidChief Executive Véronique Laury.
In France, sales at stores open more than a year rose 0.1percent, compared to analysts' average forecast of a rise of 0.5percent, reflecting a flat overall home improvement market and aslow house building market.
In the UK, like-for-like sales increased 4.6 percent, aheadof analysts' consensus forecast of up 3.7 percent, with Screwfixthe standout performer with like-for-like sales up 13.3 percent.
Total group sales fell 2.5 percent to 2.65 billion pounds.
In March Laury detailed plans to reshape Kingfisher,including closing 60 B&Q stores, cutting the number of productlines, developing unified garden and bathroom businesses andstarting a revitalisation programme for big stores acrossEurope.
She said on Tuesday that strategy was making good progress.An update on financial targets will be issued early next year.
Shares in Kingfisher, up 13 percent over the last year, weredown 1.5 pence at 343.6 pence at 1002 GMT, valuing the businessat 7.95 billion pounds.($1 = 0.6613 pounds) (Editing by Paul Sandle, Jane Merriman and Adrian Croft)
