Howden Joinery Beats H1 Profit Forecasts, Raises Inflation Warning

Howden Joinery Group (LSE: HWDN) reported first-half results that met market expectations and confirmed it remains on track to meet its full-year 2026 guidance. The company's adjusted pre-tax profit exceeded consensus estimates, driven by margin expansion and price increases.

First-Half Performance

In its report on Thursday, the company disclosed group sales of £1,030.6 million for the first half, a 3.3% increase year-over-year. This figure was slightly below the consensus estimate of £1,050 million.

However, adjusted profit before tax rose 4.3% to £122.2 million, beating analyst expectations of £120 million. The company's underlying profitability was bolstered by a 70-basis-point expansion in its gross margin to 62.8%, which it attributed to a combination of a 2% price increase, volume growth, and £8 million in cost-of-goods-sold savings. Adjusted earnings per share grew 5.5% to 17.3p.

Outlook and Cost Headwinds

Howden's management confirmed its full-year outlook, which includes the recent acquisition of DIY Kitchens, projecting sales of £2,583 million and an adjusted pre-tax profit of £361 million.

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Despite the solid performance, the company warned of mounting cost pressures. It raised its forecast for its full-year cost inflation headwind to £40 million, up from the £30 million guided in February. The increase is primarily driven by timber costs, with higher-priced inventory expected to impact the profit and loss statement in the second half of the year. In response, Howden implemented a further price increase in early July.

Operational Highlights

Performance varied across the company's segments. UK like-for-like sales growth, adjusted for trading days, slowed to 2.3% in the first half from 2.6% earlier in the year. In contrast, international operations continued to show strong momentum, with local currency like-for-like sales growing by 7.2%.

The company's acquisition of DIY Kitchens closed on June 23 and is therefore not included in the first-half results. For context, DIY Kitchens generated £136 million in revenue and £37 million in EBIT in 2025.