- B&M European Value Retail S.A. (DI)
- 04 June 2025 13:17:23
Source: Sharecast
The company said adjusted core earnings rose 0.6% to £620m, while revenue rose 3.7% to £5.57bn. B&M in February issued a profit warning and said Chief executive Alex Russo would step down in April after the retailer downgraded profit guidance for the second time this year in 2025.
Russo’s successor, Tjeerd Jegen, will take over in mid-June.
There was no outlook on future or current trading in Wednesday’s announcement. Current analyst consensus for fiscal 2026 is for group adjusted EBITDA of £621m, with a range of £569m to £646m, and adjusted operating profit of £585m, with a range of £524m to £628m.
B&M, which sells a wide range of goods from pet food to inflatable hot tubs, said like-for-like sales at its UK stores fell 3.1% in the 12 months to the end of March.
Pre-tax profit fell 13.2% to £431m, driven by higher depreciation and increased interest costs as well as a “challenging" UK retail trading environment.
It added that a "very subdued" garden season, heightened consumer caution, limited real wage growth - especially for core lower-income consumer groups who also faced the end of direct government "Cost of Living" payments - and the timing of Easter - "undeniably contributed significantly" to the sales decline.
"The group also recognises that its operational execution could have been better, and this is being addressed in current trading plans," B&M said while noting that the current year would see increased minimum wage costs, higher employee national insurance and other taxes, and inflation on input costs.
“Work continues to reduce the impact of these pressures, through driving productivity improvements and sales volume growth. The impact of these additional costs and mitigations are reflected in the current range and median of analyst consensus operating profit forecasts.”
AJ Bell investment director Russ Mould said the company should have been working harder to snare its core customer base.
“The discount retailer blamed challenging market conditions, yet its value-led business model should have thrived in a period where consumers were watching their pennies,” he said.
“It should have mopped up extra business from people trading down from more expensive options, while also being a shop of choice for cash-strapped individuals wanting bargains.”
“The lack of commentary on current trading is unhelpful, leaving investors guessing as to whether the recent sunny weather has driven an improvement in footfall and sales. However, it does allude to ongoing cost pressures, meaning the company needs to make hay while the sun shines."
Reporting by Frank Prenesti for Sharecast.com
