B&M shares plunge after bargain retailer reports sales dipped in last quarter
Share:
Shares in B&M took a hit, plunging over 10% on Thursday after the bargain retailer disclosed a dip in its UK sales for the last quarter. Despite this, the firm's chief remained resolute, asserting that the business was "undistracted" by economic news. The Liverpool-headquartered company raked in £1.4bn in revenue from October to December in the UK, marking a 2.8% increase year-on-year.
Yet, like-for-like sales—which exclude new store openings—saw a 2.8% drop. December, however, saw an uptick in like-for-like sales as customers flocked to snap up deals on toys, seasonal sweets, and festive home goods. This positive trend reportedly carried into early January, with B&M noting a warm reception to their new product lines. Peel Hunt analysts observed that revenues fell short of market forecasts, suggesting consumers were laying low during most of October and November before picking up pace in a more "encouraging" December.
Despite the festive period's performance, investors weren't buoyed, and B&M's shares in the FTSE 100-listed firm tumbled around 13% by Thursday morning. Alex Russo, B&M’s chief executive, commented: "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. 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.".
Adam Vettese, market analyst at investment platform eToro, commented: "B&M seems to have served investors cold turkey this morning with shares sinking 10% following their Christmas trading update. The company continues to open new stores which on the face of it seems positive, but this initial boost of a new unit could be papering over the cracks of problems elsewhere.".
