By James Davey
LONDON (Reuters) -British discount chain B&M reported a 16.1% increase in first-half core earnings and raised its full-year guidance, even as it was less upbeat about Christmas trading than other major UK retailers with its sales growth slowing in its current quarter.
Shares in the group, which sells everything from toys to frozen food and garden furniture and has a bigger market capitalisation than Marks & Spencer, were down 5% in morning trading, paring gains over the last year to 43%.
The group said that in the first six weeks of its third quarter, like-for-like sales in the main B&M UK business were up 1.6%.
In the last three weeks of that period, sales were up 4.5%, a slowdown from growth of 6.2% in the first half.
“The group is trading against tough comparatives making this a pleasing result against an uncertain and ever-changing economic background,” B&M said.
Despite recent macro data and a raft of consumer surveys being downbeat, retailers, including Tesco, Sainsbury’s, Next, Primark and Marks & Spencer (M&S), have all made confident comments about their prospects in the so called “Golden Quarter”, or final quarter of the year which coincides with the Christmas and year-end celebrations.
B&M said it now expected 2023/24 adjusted EBITDA of 620-630 million pounds ($761-$774 million), up from the 573 million pounds made in 2022/23.
For the first half to Sept.
23, B&M made adjusted EBITDA of 269 million pounds, with revenue up 10.4% to 2.55 billion pounds.
B&M, which currently has a network of over 700 UK stores, raised its target number of stores from 950 to 1,200.
It expects to open at least 35 UK stores in 2023/24 and at least 45 stores in each of the next two years. The group also plans to open more stores in France, where it currently trades from over 100.
“We have the runway to at least double our size in the UK in the medium term, while France also offers sizeable long-term potential,” CEO Alex Russo said.
($1 = 0.8142 pounds)
(Reporting by James Davey; editing by Sarah Young and Miral Fahmy)
