By James Davey
LONDON (Reuters) -British discount chain B&M on Tuesday forecast a 9.8% increase in full-year profit at the top end of its guidance as it reported a 10% rise in revenue helped by new store openings.
The retailer, which sells everything from garden furniture and electrical items to toys and food, said it expected to report adjusted EBITDA, its key profit measure, of 629 million pounds ($782 million) for the year that ended March 30 on revenue of 5.5 billion.
That is at the top end of its guidance of 620-630 million pounds and above the 573 million pounds it made in 2022/23.
The group, whose stock market value of about 5 billion pounds is similar to that of Marks & Spencer (OTC:), opened 47 B&M UK stores in 2023/24 and plans to open not less than 45 in each of the next two financial years.
It currently trades from 741 stores in the UK under the B&M brand, 335 stores under the Heron Foods and B&M Express brands, and from 124 stores in France.
The group said B&M UK’s like-for-like sales were up 2.9% in the fourth quarter.
Though that was an improvement on third quarter growth of 1.2%, the outcome benefited from an early Easter and was a touch short of analysts’ consensus expectations.
Shares in B&M were down 2.5% in early trading, with analysts also saying the market had anticipated a strong EBITDA outcome.
CEO Alex Russo said the group’s “relentless focus on everyday low prices (EDLP), great product ranges and excellence in operational standards” had chimed with customers.
With inflation slowing and interest rates likely to come down soon, there is improving confidence among UK consumers about the outlook for their finances.
An early Easter boosted food spending in Britain last month, lifting retail sales by the most since August, though wet weather dampened demand for garden furniture, home improvement products, clothing and footwear, the British Retail Consortium said last week.
Tesco (OTC:), Britain’s biggest retailer, said last week it was seeing early signs of improving consumer sentiment.
($1 = 0.8042 pounds)
