B&M UK Like-For-Likes Decline in Q3 After Difficult November

B&M European Value Retail S.A. ("the Group"), the UK's leading variety goods value retailer, today provides a trading update for the third quarter of its current financial year, relating to the 13 week period from 30 September 2018 to 29 December 2018. 

Highlights 

- Group sales revenue growth in the quarter of 12.1% at constant currency; B&M UK like-for-like ("LFL") revenues for the quarter -1.6% against a strong prior year comparable of +3.9% 
- Pleasing finish to the quarter with December B&M UK +1.2% LFL Sales and +3.2% LFL Cash Gross Margin, after a difficult November 
- Strong inventory control delivered an estimated +30bps expansion in Gross Margin percentage over the quarter 
- Positive sales momentum has continued into January
- 13 B&M planned gross new store openings for the final quarter  

 Revenue Summary 

Commentary

Group

Group sales revenue for the quarter increased by 12.1% on a constant currency basis. On an actual currency basis, total sales revenue increased also by 12.1% (2017: 22.9%) to £1,087.1m (2017: £969.8m).

B&M²

B&M UK sales revenue in the 13 week period increased by 4.5% to £874.5m (2017: £837.3m) with LFL sales -1.6%, against a strong comparative of +3.9% last year.

LFL Cash Gross Margin⁵ was held back by a disappointing November but ended with a strong finish in December at +3.2% and +£3.2m.

December's positive trading momentum has continued into early trading in January. Careful control of inventory has meant that stocks for the January 2019 end of season sale period are below the levels of last year, which should provide further support to the margin over Q4.

We opened a net 20 new stores in the quarter and we continue to see attractive returns from the new store opening programme. We are on track to open 56 gross new stores in FY19.

Outlook

Our January period has started well and we are well positioned for the remainder of the financial year. Our pipeline of new stores is healthy and we remain on track to deliver continued sales and earnings growth this financial year and the next.

Simon Arora, Chief Executive, said,

"Despite the broader economic uncertainty over the last quarter, B&M is on track to deliver a record year for both sales and earnings, representing our fourteenth consecutive year of profit growth.

The business' ability to manage profitability through uncertain trading conditions is testament to the resilience of the business model and the strong operational controls we have in place. We continue to open new stores and win market share when other retailers are retrenching.

I would like to thank all our colleagues across our UK, German and French businesses for their hard work and commitment over our busiest ever peak Christmas period. I am pleased by the December trading and the positive momentum with which we enter 2019. We look forward to the year ahead with confidence as our value proposition is clearly resonating with shoppers."                                                                                         

Source : Insight DIY Team and B&M Retail

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