Kingfisher, Europe's largest home improvement retailer, met analysts' expectations for first-quarter earnings and reached agreements to complete almost a quarter of its planned B&Q store closures.

Operating profit excluding one-time items, amortisation and some joint-venture figures, fell 4.8 per cent from a year earlier to £150 million (€210 million) in the three months ended May 2nd, Kingfisher said in a statement yesterday. That compared with the £148.5 million median estimate of 16 analysts compiled by Bloomberg.

Most of Kingfisher's businesses have "better momentum than expected heading into peak season", said Simon Irwin, an analyst at Credit Suisse, in a note. "Execution under CEO Veronique Laury appears to be accelerating."

Since taking the helm in December, Ms Laury has set about closing stores and cutting excess space as an increasing number of UK customers choose to shop online or opt against do-it-yourself projects. To reduce costs London-based Kingfisher is working to offer the same product lines across its chains internationally.

"We have made a solid start to the year against strong comparatives," Ms Laury said in the statement. "In the UK, B&Q continued to grow sales volumes and Screwfix delivered an excellent performance."

In the first quarter Kingfisher put agreements in place with two national retailers to take over its lease agreements on 14 B&Q stores over the next two years. The company announced in March that it plans to close 60 stores.

"Subletting 14 stores already is quicker than expected," Jamie Merriman, an analyst at Sanford C Bernstein, said by phone. "There were skeptics who thought they wouldn't be able to do it."

The deals will leave the company with a lower rent bill and a healthier cash position. Group revenue increased 0.8 per cent at stores open at least a year, excluding currency shifts. – (Bloomberg)