B&M shares continue to gain amid strong profit outlook
SHARES of B&M European Value Retail continued to gain on the bourse for the second day last Thursday (9) on the back of a robust earnings forecast by its management.
The discount retailer said it expects its pre-tax profit to be in “the range of £275 million to £285m” for the first half of the financial year, beating analysts’ consensus estimate of approximately £235m.
“While group revenues year to date have been broadly in line with market expectations, gross margins have been stronger than originally anticipated in the B&M UK fascia business”, it said in a trading update last Wednesday (8).
The performance of general merchandise and seasonal categories has been encouraging, it said, adding sell-through rates have been “high” and “accordingly end of season markdowns have been limited”.
The variety store chain, however, warned that the demand remains uncertain for the rest of the financial year. “Although the group is well-positioned for the upcoming golden quarter, trading patterns and strength of customer demand remain highly uncertain for the balance of FY22.”
The retailer, which sells a wide range of goods from food to homewares, do-it-yourself and gardening products, saw its business volumes swell as shoppers preferred its out-oftown stores, avoiding high streets and shopping centres because of Covid-19 fears.
The growth of the company through the pandemic has been reflected in its stock prices which more than doubled since April 2020 lows.