Falling sales at Wesfarmers' Bunnings businesses in the UK and Ireland have prompted analysts to voice concerns about the conglomerate's foray into the UK home improvement market.
Bunnings, which bought the British Homebase business in February last year, says its UK and Ireland business suffered a 13.8 per cent fall in sales to $457 million during the first quarter of the 2018 financial year.
This follows the division's $89 million loss in the 2017 financial year.
During a results briefing on Wednesday, analysts expressed concerns about the "high risk" move into the UK.
Merrill Lynch's David Errington told Wesfarmers executives he was worried the UK troubles were being brushed aside and asked when the company would cut its losses and "get out."
"I'm worried that this business will turn into that Monty Python scene where you get an arm chopped off and you say 'it's only a flesh wound' and then a leg gets chopped off and you say 'we are right, everything is fine,' and then the poor bloke is left with just a torso and then nothing is left," Mr Errington said.
"There's no way that you would have expected to be in this position that you are in - in a very troubled market in the UK - with 250 Homebase stores that are going backwards."
Outgoing Wesfarmers chief executive Richard Goyder said while the UK expansion had risks, it was too early to judge the move.
"We are not happy with the performance of the Homebase stores," Mr Goyder said.
"This (turnaround) will take longer than we would have liked but we continue to think there's a significant opportunity to grow a profitable business in the UK."
Wesfarmers' Australian and New Zealand Bunnings business continued to perform strongly with store-on-store sales up 10.8 per cent in the 13 weeks to September 24 - markedly higher than the 5.5 per cent growth posted for the same period a year ago.
However, the group's supermarket business Coles suffered a slowdown in first-quarter sales growth, courtesy of a rapid fall in the price of fresh produce and competition from a resurgent Woolworths.
The retailer's comparable food and liquor sales grew only 0.4 per cent in the first quarter compared to a 1.8 per cent lift in the same period a year ago.
Wesfarmers says a 2.3 per cent fall in food and liquor prices during the first quarter of 2017/18 weighed on Coles' sales growth, with bumper supplies of fruit and vegetables keeping produce prices down.
Coles managing director John Durkan said excluding fresh produce, food and liquor comparable sales were broadly in line with the trend achieved in the 2017 financial year.
Convenience store comparable sales growth was also weaker at 0.2 per cent, dragged down by a 21 per cent fall in fuel volumes.
Mr Goyder said overall, the group's sales performance was "generally pleasing" and noted continued strong performance from the Bunnings Australia and New Zealand, Kmart and Officeworks chains.
Shares in Wesfarmers closed down $1.24, or 2.9 per cent, at $41.49.
WESFARMERS FIRST QUARTER RETAIL SALES BREAKDOWN:
* Coles total food and liquor sales up 1.5pct to $7.97b * Coles Express sales down 9.5pct to $1.4b * Bunnings Australian and NZ sales up 11.5pct to $2.96b * Bunnings UK & Ireland sales down 13.8pct to $457m * Kmart sales up 9.0pct to $1.36b * Target sales down 6.4pct to $602m * Officeworks sales up 7.8pct to $497m
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