Discount retailer B+M lowers profit forecast range
Discount retailer B+M has issued a cautious downgraded profit forecast this morning, following a 2.8% increase in revenue for the third quarter of 2024, including Christmas.
A build up of stock last year has mitigated supply chain issues through the Christmas period and the Liverpool headquartered retailer says it also has been slashing prices as consumers face cost-of-living pressures.
Like-for-like sales at B+M’s UK business dropped 2.8% in the quarter ending in December, but it claimed positive growth compared with a 1.9% decline in the second quarter.
The company now expects its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to come in the range of £620m to £650m, revised down from previous forecast range of £620m £660m.
The company plans to open approximately 73 new stores (45 in B+M UK, 11 in B+M France and 17 in Heron Foods). The 2026 opening programme is on track with 45 planned openings in B+M UK.
Alejandro Russo
Alex Russo, Chief Executive, said, “Our performance across the Golden Quarter reflects disciplined operational execution across our businesses, driving volume and in turn profit growth. 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. Pricing, availability, store standards and a disciplined opening programme will underpin positive volume growth across our ranges. Our DC logistics network capacity upgrades are on-track in both the UK and France to support long-term growth.
“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. This allows us to drive volumes by offering our best-selling products at exceptional value to every customer. Through this volume growth, and with our leading return on capital business model, we continue to generate profit and cash returns for our shareholders.”
Russ Mould, investment director at Manchester investment platform, AJ Bell, said: ““There is little you could do to dress up value retailer B&M’s quarterly numbers.
“While hardly a disaster, the negative like-for-like growth in sales reflect poor consumer sentiment and suggest that the chain’s value credentials aren’t doing enough to support demand.
“A £150m special dividend, aimed at keeping investors onside, was largely dismissed as the stock tumbled.”
