B&M sees rise in sales and plans wave of store openings
B&M has reported a rise in sales as customers are squeezed by high inflation and the discount retailer plans a wave of new stores, including those formerly owned by collapsed rival Wilko.
Its earnings for the six months to 23 September saw group revenue rise 10.4 per cent on the year prior to £2.55bn, driven by an increase in customer transactions.
“All four of our channels of growth are delivering strong results, underpinned by our relentless focus on low prices, cost control, simplicity in everything we do and disciplined profitable growth,” said chief executive Alex Russo.
He noted the company’s September agreement to acquire up to 51 ex-Wilko stores after the retailer collapsed.
B&M updated its long-term guidance to reach a total of a least 1,200 UK stores, up from a target of 950 in 2017.
Russo said that the guidance gave B&M “the runway to at least double our size in the UK in the medium term, while France also offers sizeable long-term potential”.
The firm expects to open at least 125 new stores in the UK over the next three years, boosting sales by up to 20 per cent.
B&M raised its EBITDA guidance to between £620m and £630m in 2024, compared to £573m in 2023.
“The group is trading against tough comparatives, making this a pleasing result against an uncertain and ever-changing economic background,” the company said.
Despite the strong overall results, B&M shares slumped nearly six per cent on Thursday morning.
Russ Mould, investment director at AJ Bell, said: “Despite upgraded guidance on earnings and store roll-out ambitions, discount retailer B&M was out of favour with the market on its latest update.
“A proposition of selling a range of discounted goods should chime with households which are looking to save money, so perhaps there was some disappointment at relatively sluggish like-for-like growth in the first six weeks of its ‘golden quarter’, even if the picture in the last three weeks has been more encouraging.
“An admission that volatile market conditions make forecasting tough may also have been in the minds of investors.”