Britons‘ bargain hunting boosts B&M’s profits. British discount retailer B&M (BMEB.L) anticipated stronger core earnings for the 2023-24 financial year on Wednesday as customers buy budget food and goods in a cost-of-living constraint, pushing its shares nearly 6% higher.
The FTSE-100 company claimed it benefited from people switching to cheaper options, especially own-label goods, where B&M has done well in recent 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 stated.
As food and energy prices rise, shoppers buy more own-label products, cheaper than brands, helping discount stores outperform their mainstream counterparts.
“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.
On Wednesday, market researchers NIQ reported that British retailer own-label sales grew twice as fast as branded goods in 2023.
B&M, which offers toys, frozen food, and garden furniture, posted adjusted core earnings of 573 million pounds ($710 million) for the year ended March 25, down 7.4%.
Adjusted earnings before interest, taxes, depreciation, and amortization were projected at 560-580 million pounds.
The largest increase on London’s blue-chip index (.FTSE) was 6% at 501 pence at 0808 GMT.
B&M’s sales, boosted by COVID-19 demand for essentials, remained higher than pre-pandemic levels. However, a first-half drop in UK store sales lowered its yearly margin to 11.5% from 13.2%.
UK like-for-like sales rose 8.3% in the first nine weeks of the new financial year.
Comment Template