B&M shares fall as it lowers guidance

B&M has seen its shares fall 12% in early trading after it warned of a difficult trading period ahead, despite seeing its revenues surging 3.5% during the 13-week period from 29 September 2024 to 28 December 2024. It comes as its UK arm experienced a 2.8% increase in sales to £1.38bn and while B&M France also saw an 12.8% increase to £164m. However, this was partially offset by the performance of Heron Foods which saw its sales during the period decline by 5.6%. On a like-for-like basis the bargain retailer said sales declined by 2.8%. Both FMCG and general merchandise saw excellent seasonal range sell-through, with Seasonal Confectionery, Toys, Seasonal Christmas Home ranges all delivering positive volume growth and positive LFL4 performance in December. Despite the performance, B&M said that it now expects its underlying profit guidance to be within the range of £620m to £650m. It also confirmed it is on track to open approximately 73 gross new stores across the Group in FY25 (45 in B&M UK, 11 in B&M France and 17 in Heron Foods). Its FY26 opening programme is also on track with 45 planned openings in B&M UK. The board of B&M has declared a special dividend of 15.0p per Ordinary Share, equivalent to £151m, to be paid on 14 February 2025 to shareholders on the register at 17 January 2025. Alex Russo, B&M 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.” He added: “With three quarters of the financial year now complete, we narrow our previously disclosed profit growth guidance range. FY25 Group adjusted EBITDA (pre-IFRS 16) is now expected to be in the range of £620m to £650m (FY24 52 weeks: £616m / FY24 53 weeks: £629m). This is equivalent to group adjusted operating profit of between £590m to £620m. “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.”