B&M European Value Retail’s share price sank from 15-month highs on Thursday following the release of first-quarter financials.
At 551p per share the FTSE 100 business was last dealing 6.7% lower on the day. It remains 47% more expensive than it was a year ago.
The value retailer said that “strong, profitable trading momentum across all three fascias has continued in recent weeks.” Trading at the retailer — which owns the B&M UK, B&M France and Heron Foods retail brands — came in in line with forecasts during the 13 weeks to 24 June, it said.
Group sales rose 13.5% year on year in the period to £1.3 billion, B&M announced.
Sales Rise Across The Board
Sales at its B&M UK division rose 11.3% during quarter one, it said, to £1.1 billion. On a like-for-like basis revenues were up 9.2%.
The company said that “both grocery and general merchandise categories have performed very well” at its core unit. It said that this was “driven by consistently strong and positive like-for-like transaction numbers.”
Meanwhile, sales at Heron Foods were up 19.4% at £135 million. At B&M France the firm recorded turnover of £117 million, up 29.1% year on year.
“Strong Trading Momentum”
Chief executive Alex Russo said that “our strong trading momentum demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail standards.”
He added that “the business is well positioned as we start to transition to our autumn winter season. We will continue to work hard to help all our customers manage the cost-of-living crisis.”
B&M is thriving as rampant inflation puts consumer spending under the cosh. Group revenues rose 6.6% during the 12 months to March to £5 billion, the firm announced in May.
The company expects to grow adjusted earnings this year from the £573 million it reported in financial 2023.
“The charm of B&M”
Mark Crouch, analyst at trading platform eToro, said that “it’s clear that B&M’s focus on price and value is winning customers over during the current cost-of-living crisis.”
He noted that the firm is benefiting the current trend of consumers trading down or shopping at cheaper retailers. He commented that “this is the charm of B&M, which often sells big-name brands at reasonable prices, which is a winning combination and attracting new customers in the current environment.”
However, Crouch warned that B&M has a challenge on its hands “to ensure that it can become a go-to retailer in more normal times and not just as a cheap alternative when the economy starts to creak.”
Read the full article here