- First quarter sales up 2.4%
- On track to open 45 UK stores
- New stores performing well
Shares in B&M European Value Retail (BME) gained more than 4% on Tuesday topping the FTSE 100 leaderboard after the discount variety retailer revealed less worse than feared first quarter like-for-like trading in the UK.
B&M UK like-for-like sales for the 13 weeks to the end of June declined 3.5% after adjusting for the timing of Easter against ‘exceptionally’ strong comparatives of 9.2% in the first quarter of 2023 and inclement weather in April and May.
Liberum analysts said the first quarter update was marginally better than many had feared. ‘This means the group has printed a Q1 2-Yr LFL print of +4%’ explained Liberum, with comparatives for the rest of the year falling to single-digits.
HOW DID THE GROUP PERFORM?
Group revenue increased 2.4% in constant currencies to £1.34 billion driven by volume and new store openings across the three businesses. The firm opened 19 new stores in the UK and said it was on track to open 45 in the financial year to 31 March 2026.
Encouragingly, the company said new stores opened since last year are performing ahead of expectations. In France the company added two new stores and is on track to open 11 for the year.
The businesses have delivered high sell-through in the quarter with no markdown risk for the spring/summer aided by ‘well-planned’ seasonal stock buying, particularly in gardening.
Chief executive Alex Russo commented: ‘We continue to offer our customers exceptional value at a time when household incomes are under pressure.
‘Ahead of Q2, we have launched our Everyday Value range with more than 500 new lines in core categories across home, electrical and pet in the UK and France.’
WHAT THE EXPERTS ARE SAYING
B&M’s lack of like-for-like growth and focus on store expansion seems to have divided the analyst community.
Liberum said: ‘The predictability of B&M’s model is driven by market share gains from a ‘cookie-cutter’ store roll-out and its disruptive, value-focused offer – which has been further entrenched as we head into Q2’.
Julie Palmer, partner at Begbies Traynor said: ‘At a time where retailers must remain agile, the launch of its Everyday Value range seems a sensible response to the current strains household finances face with the move helping to ensure the retailer remains a go-to for budget-conscious shoppers.
Investment analyst Dan Coatsworth at AJ Bell took a more cautious stance: ‘B&M should have benefited from individuals trading down from more expensive shops over the past few years, but that catalyst now looks to have played out.
‘Competition is fierce and unless B&M can produce a radical new idea to accelerate sales growth, the company might be wading through mud for some time.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor (Steven Frazer) own shares in AJ Bell.
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