B&M Sees Higher Profit As Britons Hunt For Bargains

By Donna Ahern
B&M Sees Higher Profit As Britons Hunt For Bargains

British discount retailer B&M on Wednesday forecast higher core earnings for its 2023-24 financial year, as customers snap up budget food and goods in a cost-of-living crunch, sending its shares nearly 6% higher.

The FTSE-100 firm said it was benefitting from people switching to cheaper alternatives including own label goods, an area where B&M has performed well over the last few years.

"We are actively responding to the short-term pressure on consumers from the cost-of-living crisis, with a relentless focus on price and value," CEO Alejandro Russo said in a statement.

Own-Label Sales 

Shoppers have been buying more own-label lines, which are usually cheaper than branded products, as they grapple with soaring food and energy bills, helping discount retailers outperform their mainstream peers.

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"With inflation still biting hard, shoppers are desperately searching for ways to save money wherever they can and B&M is benefitting from this focus on frugality," said Hargreaves analyst Susannah Streeter.

Sales of own-label products at British supermarkets have grown at double the speed of branded goods in 2023, data from market researchers NIQ showed on Wednesday.

B&M, which sells everything from toys to frozen food and garden furniture, reported adjusted core profit of £573 million for the year ended 25 March, down 7.4% from the year before.

EBITDA

The company had expected adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of £560-580 million.

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Its shares were up 6% at 501 pence at 0808 GMT, the biggest gain on London's blue-chip index .FTSE.

B&M's sales, which had got a boost from COVID-induced demand for essential items, continued to perform better than pre-pandemic times.

Its annual margin, however, fell to 11.5% from 13.2% the year before, hit by a first-half downturn in its UK store sales.

Like-for-like sales for its UK unit in the first nine weeks of the new financial year were up 8.3%.

Read More: British Retailer B&M Picks DFS Furniture's Schmidt As CFO

News by Reuters, edited by Donna Ahern, Checkout. For more Retail stories, click here. Click subscribe to sign up for the Checkout print edition.

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