- B&M blames sales drop on weather
- UK sales fell 3.5% year-on-year
- Group revenue rose 2.4% to £1.3 billion
B&M has attributed a drop in first-quarter UK sales to ‘unseasonal weather’ during a rainy April and May.
The FTSE 100-listed bargain retailer reported a 3.5% year-on-year drop in like-for-like UK sales for the 13 weeks between March 31 and June 29, disregarding the timing of the Easter bank holiday.
B&M said the fall was also influenced by ‘exceptionally good’ sales at the same time last year when UK revenues increased by 9.2 per cent.
Overall, B&M group revenue increased by 2.4% to £1.3 billion.
The company’s French segment increased revenues by 7.5% to £126 million, while Heron Foods’ sales increased by only 2.7% to £139 million.
B&M shares rose 5.46 per cent to 471p in early afternoon trade on Tuesday.
The Merseyside-based company also opened 19 outlets in the UK during the quarter, which it said were already doing better than projected.
In April, the company promised to open at least 45 new British stores in ‘each of the next two financial years.
The business, which sells household and DIY supplies, food, and apparel, has 755 stores in the UK and 335 Heron Foods and B&M Express locations.
It has previously stated that it intends to open at least 1,200 stores throughout the country over time, up from the previous objective of 950.
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B&M CEO Alex Russo stated, ‘We continue to provide our consumers outstanding value at a time when household incomes are under strain.’
Mark Crouch, an analyst at eToro, stated, “Shareholder returns have been consistent, which is a positive sign.” However, the firm’s share price has dropped by a fifth this year, so investors will hope this is not a warning indication that the company is growing too swiftly.
Meanwhile, Clive Black, an equities analyst at Shore Capital, believes the store risks falling behind big supermarket loyalty efforts, most notably Tesco’s Clubcard plan.
While Dan Coatsworth, financial analyst at AJ Bell, cautioned that intense competition meant that ‘unless B&M can develop a radical new idea to boost sales growth, the company would be slogging through muck for some time’.
