The B&M European Value Retail group has upped its full-year profit estimates after benefitting from taking delivery of imported stock earlier than usual to avoid the supply chain disruption that has affected other retailers.
“Our decision to take receipt of imported Christmas stock early in the season meant we were able to provide customers with great products at great prices,” said Chief Executive Simon Arora.
Group revenue on a constant currency basis grew only 0.1% to £1.40bn during its third-quarter to 25 December, although the group upped its full-year EBITDA expectations to between £605m and £625m – well ahead of the current analysts’ consensus of £578m.
Sales growth figures at its core B&M fascia in the UK faced tough comparatives with last year when it benefitted from the Covid restrictions that forced some other retailers to close. Like-for-like sales at the 693-strong chain slipped 6.2% on a year-on-year basis but were up 14.0% compared to pre-pandemic levels in 2019.
The group said it saw strong performance across all categories, with “excellent sell-through” of seasonal ranges supporting margins in the period. A total of nine new B&M stores opened in the quarter, with 2 closures. The retailer expects to open 13 more stores before its year-end.
The company’s Heron Foods discount convenience chain saw its total sales increase 2.2% to £105.2m. Like-for-like figures were not revealed but the group said performance at the 310-strong chain continued to improve, with positive growth on a two-year basis.
The operation in France continued its recovery from Covid restrictions the previous year, with revenue up 30.0% year-on-year to £108.8m. The group revealed that all but one of the 107 stores are now under the B&M fascia.
Arora concluded: “Although the pandemic continues to create challenges for retailers and consumers alike, our relentless focus on value-for-money remains undiminished. Despite ongoing supply chain disruption, inflationary pressures and uncertainty surrounding possible Covid-related restrictions, we remain confident in B&M’s prospects for 2022.”
NAM Implications:
- Most retailers anticipated end of year supply issues…
- …or should have.
- But B&M bit the bullet and took early delivery, to their benefit.
- Key will be their ability to maintain their value-for-money positioning…
- …when rivals inflate.
