MetiNews.Com B&M bid up following stronger than expected quarterly sales Breaking news
MetiNews.Com - Discounter B&M European Value Retail (BME) reported a bumper, better than expected rise in first quarter sales on Wednesday, which showed June trading ticked up from already elevated levels.
Breaking News ! Discounter B&M European Value Retail (BME) reported a bumper, better than expected rise in first quarter sales on Wednesday, which showed June trading ticked up from already elevated levels. Yet chief executive Simon Arora stuck with his cautious outlook, pointing to ‘a great deal of uncertainties ahead’, which meant the shares traded up a rather modest 4.3% to 414.6p. DOING BRISK BUSINESS Liverpool-headquartered B&M European Value Retail had already reported brisk business for the first eight weeks of the new financial year last month. Like-for-like sales shot up 22.7% in the core B&M UK chain as the retailer’s budget wares and convenient out of town locations drew in price-conscious shoppers and DIY and gardening products flew off the shelves. Today’s positive update for the first quarter to 27 June revealed that like-for-likes in the B&M UK business grew 26.9%, implying an uptick in trading for June, as group revenue grew 27.
The commentary from the cut-price general merchandise purveyor also highlighted a steady recovery in customer count over the quarter after an initial lockdown-induced decline, whilst the average transaction value has been at ‘significantly elevated levels’.
B&M’s convenience store chain Heron Foods saw strong double-digit like-for-like sales growth and the French business Babou enjoyed like-for-like growth of 32% after reopening on 11 May 2020.
Arora said his charge has made ‘a strong start to the financial year, with a particularly strong performance in our UK businesses, and progress now resumed in France after an 8 week closure period’, though he stressed there are ‘a great deal of uncertainties ahead’.
THE SHORE CAPITAL VIEW
Shore Capital said this was a strong trading quarter for B&M, which ‘remains a well-managed company with good cash generation and tight stock and cost controls’, although the broker also noted ‘the continued cautious outlook with uncertainties from COVID-19. In particular it remains to be seen how long the social distancing rules will remain in place and what impact this will have on peak trading this Autumn.’
The broker added: ‘B&M is firmly in the retail survivor camp to us, given the strength of its balance sheet’, while reiterating its ‘hold’ rating on the shares.
Shore Capital takes the view ‘the shares look up with events for now given the uncertainty from COVID-19 on the wider consumer economy and we would need to see greater visibility on potential earnings upgrades to be more positive.’
READ MORE ON B&M EUROPEAN VALUE RETAIL HERE
Source = MetiNews.Com