B&M sales dip as discount retailer names new chief
Discount retailer B&M has warned trading patterns are anticipated to “remain unpredictable” in the year ahead, while it feels ready to reap the rewards of shoppers hunting for bargains amid sky-high inflation.
In results for the year to 26 March 2022, group revenue dipped 2.7 per cent on the prior year to £4.67bn. However, this was a 22.5 per cent increase compared to the 2020 full year.
Despite warning of “many and varied uncertainties and headwinds,” the group said adjusted EBITDA for the 2023 full year was expected to be in the range of £550m to £600m, significantly ahead of the 2020 level of £342m.
Analysts at Third Bridge have anticipated EBITDA levels will decline around 12.5 per cent for the upcoming trading year.
Group adjusted EBITDA for the year was £619m, down on the £626m garnered in 2021. However, earnings had soared some 80 per cent compared to the full year 2020.
B&M also named Alex Russo, currently chief financial officer, as the successor to outgoing CEO Simon Arora.
“Despite a tough trading landscape, discounter B&M is likely to benefit from the cost of living squeeze as shoppers trade down,” Third Bridge’s analyst Ross Hindle added.
“Our experts believe B&M has the ability to pass on inflation costs to its customers without compromising on its price gaps with key competitors. It will also consider other creative alternatives such as re-engineering certain products and shrinkflation.”
Despite bosses’ confidence that the group can capitalise on customers shopping downwards, Russell Pointon, director of consumer at Edison Group said that it was “difficult to determine how consumer spending behaviour will change as macroeconomic pressures continue to mount.”
B&M’s share price plunged by almost nine per cent on Tuesday morning.