UK discount retailer B&M sales rise in Christmas quarter
LONDON (Reuters) -British discount retailer B&M said comparable sales rose 6.4% in its key Christmas quarter, showing that shoppers sought out value options as they grappled with the cost-of-living crisis.
Reflecting strong momentum during the 13 week period to Dec. 24, the FTSE 100 group also said on Thursday it intended to pay a special dividend of 20 pence per share in February.
B&M, which sells everything from toys to frozen food and garden furniture from 1,100 stores in Britain and France, said strong demand for non-grocery products helped lift margins as it posted a 12% jump in quarterly revenue to 1.56 billion pounds ($1.88 billion).
For the year to the end of March it said it expected annual core earnings of between 560 million pounds to 580 million pounds, higher than the current analyst consensus forecast of 557 million pounds.
In recessionary times, discount operators tend to do relatively better than mainstream peers as they have lower cost bases and shoppers become more price sensitive.
"Despite the challenging macroeconomic environment, we will continue to work hard to help both existing and new customers manage the cost-of-living crisis," B&M chief executive Alex Russo said in a statement.
Overall UK inflation is running at 10.7% and consumers face the prospect of a tighter squeeze in 2023, with higher taxes and mortgage rates and scaled-back government support on household energy bills.
B&M has a market capitalisation of 4.4 billion pounds making it more valuable than one of Britain's most famous retailers, Marks & Spencer, which is worth 2.6 billion pounds.
($1 = 0.8318 pounds)
(Reporting by Sarah Young, Editing by Paul Sandle)