B&M European Value Retail has posted disappointing first-quarter results after the wet weather during spring and early summer impacted demand for seasonal items.
Group revenues increased 2.4% to £1.35bn, driven by store openings across its three businesses. This included 19 of its core B&M outlets in the UK, with the chain on track for 45 gross new store openings in the year.
However, like-for-like sales at B&M slipped 3.5%, with the group blaming tough comparatives with a strong period (+9.2%) last year and the unseasonal weather in April and May.
However, the retailer noted that well-planned seasonal stock buying, particularly in Gardening, had delivered high sell-through in the quarter with no markdown risk in the months ahead. B&M UK’s gross margin performance was said to have been “strong and in line with expectations”.
At B&M France, revenues rose 7.5% to £126m, while discount supermarket chain Heron Foods grew 2.7% to £139m. Like-for-like figures were not revealed.
The group stated that the three businesses were “well set up commercially and operationally into Q2”, with availability “very strong” and product ranges and price points in general merchandise being “market leading”. It also noted that its recently strengthened logistics capacity across the UK and France was continuing to support volume growth.
“The growth fundamentals of our business are strong, with a highly disciplined approach on pricing, product and high operational standards,” said Chief Executive Alex Russo.
“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. As we transition towards Autumn/Winter in the months ahead, our relentless focus on Everyday Low Price and Everyday Low Cost will ensure we continue to serve our customers well.”
NAM Implications:
- Taking Q1 results rationale at face value…
- …the fact remains that B&M’s value strategy fits market need.
- Their focus on Everyday Low Price and Everyday Low Cost remains a basis for growth…
