Budget retailer B&M’s shares sink as UK sales growth fizzles
The Liverpool-based retailer said it generated £1.4 billion in revenues between October and December.
Shares in B&M tumbled by more than a 10th on Thursday after the discount retailer revealed its UK sales dipped over the final quarter, as its boss insisted the business was “undistracted” by economic news.
The Liverpool-based retailer said it generated £1.4 billion in revenues between October and December in the UK.
This was 2.8% higher than the same period a year ago.
The business remains undistracted by the current economic headlines
However, when compared like-for-like, which strips out the impact of sales from new store openings, it marked a 2.8% decline.
But it said like-for-like sales were higher in December alone, with shoppers bagging a bargain in the run-up to Christmas on items including toys, seasonal confectionery and festive home ranges.
This momentum has continued into the first few days of January, with customers responding well to newly launched ranges, B&M reported.
Analysts for Peel Hunt said revenues came in below market expectations, “indicating that consumers went underground for most of October and November” before a more “encouraging” December.
The Christmas update was not enough to cheer investors and shares in the FTSE 100-listed company dropped about 13% on Thursday morning.
Alex Russo, B&M’s chief executive, said: “The business remains undistracted by the current economic headlines.
“Our operating model is well set up to give customers exceptional value when they need it most.
“Our strategy is clear – we are an everyday low-price discounter with a laser focus in keeping excellence in retail standards and our costs the lowest.”
Adam Vettese, market analyst at investment platform eToro, said: “B&M seems to have served investors cold turkey this morning with shares sinking 10% following their Christmas trading update.
“The company continues to open new stores which on the face of it seems positive, but this initial boost of a new unit could be papering over the cracks of problems elsewhere.”