B&M European Value Retail Q3 Results – What The Analysts Said

By Steve Wynne-Jones
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B&M European Value Retail Q3 Results – What The Analysts Said

Discount retailer B&M European Value Retail has reported a 12.3% increased in revenue in the third quarter of its financial year, to £1.567 billion (€1.77 billion), citing a 'very good performance' across all product categories.

Commenting on its performance, Alex Russo, chief executive, commented, “Our strong momentum throughout the Golden Quarter across the businesses demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail execution."

Here's how leading industry analysts viewed its performance.

Tash Tesseyman, GlobalData

“B&M has performed well this festive period, as consumers turned to the discounter for both grocery and general merchandise purchases.

“Against a weak comparative, B&M’s UK arm bounced back this quarter as revenue reached £1,302m, up 10.3% on Q3 FY2021/22. This was aided in part by store expansion, as 12 new UK stores have been opened since Q3 last year. However, B&M’s like-for-like sales in the UK were also robust during this period, up 6.4% in Q3 FY2022/23, as the discounter benefited from consumers trading down in the lead-up to Christmas.


"Despite UK total retail volumes expected to decline 6.2% in 2023, according to GlobalData, discounters will likely come out on top as low-price points entice consumers to switch away from supermarket chains like Tesco and Sainsbury’s for food & groceries.

“Going into the Christmas period this year, B&M was able to keep its stock in line with demand as its supply chain performed well this quarter. Stock availability will be key for the discounter in 2023 to ensure consumers do not switch away to rivals such as Home Bargains and The Range, as shoppers search for low prices due to continued inflationary pressures.”

David Hughes, Stifel

"B&M today report a strong 3Q with revenue up by 12% YoY to £1.57bn, driven by a continuation of LFL growth of 6.4% in B&M UK while B&M France saw revenue growth of 25% and Heron Food saw growth of 23%. This revenue reflects the draw of B&M's strong price position at a time when the rising cost-of-living crisis continues to put pressure on household budgets.

"Based on latest trading, management has updated FY23 adj. EBITDA (pre-IFRS 16) guidance to £560-£580m (previously £550-£600m), above current consensus of £557m and broadly in line with the Stifel forecast of £567m."


Eleonora Dani, Shore Capital

"B&M European value Retail (B&M), the discount variety chain, has published a trading update for the 13 weeks to 24 December 2022. The total Q3 trading period highlights group revenue growth of 12.3% at constant currency, driven by what is described as an ‘excellent sell-through’ in key general merchandise ranges and strong performance in grocery.

"B&M is a well-run company with a clear customer proposition and a growth story centred on further store rollout with a capital-light model with a fast payback."

Adam Tomlinson, Liberum

"A strong Q3 (to 24 Dec 2022), including B&M UK LFLs +6.4% y/y, means FY23E EBITDA guidance has narrowed to £560m-580m (from £550m-600m). Gross margin - the main risk over Christmas - has improved with ‘excellent’ sell-through in general merchandise – a key positive. A 20p per share special div (£200m), following the £850m of specials over FY20-22 once again reflects very strong cash generation.

"B&M’s leading value proposition should drive further continued trading resilience into FY24E."


Russ Mould, AJ Bell

“The bricks and mortar retail channel is far from dead, judging by the latest round of retail sector trading updates. Next and B&M have both raised their full-year earnings guidance and Greggs has proved to be resilient in the face of weakening economic conditions.

“We’re now many months into a severe cost-of-living crisis, yet the latest figures would suggest that certain retailers can still draw in the crowds if the proposition is seen to be good value for money.

“B&M appeals to people who want to trade down from more expensive retailers, showing that the value proposition from a pricing perspective is a winning model in the current environment. Importantly, it talks about improved gross margins and more efficient supply chains, two areas which have been problematic for the retail sector in the past year.

“All three are united by having a presence on retail parks where business has been better than expected in general. Widespread train strikes will have prevented a lot of people from going to city centre shops, which means retail parks with their plentiful parking spaces have been the preferred alternative shopping destination.


“None of these three companies are blind to the fact that consumers are still under significant financial pressure, yet if they’ve been able to successfully navigate a tough end to 2022, there is good reason to suggest they could continue to keep their chins up as we move through 2023.”

© 2023 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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