B&M shares fall as results leave analysts with ‘more questions than answers’

Analysts said discounter B&M’s results today raised “more questions than answers” as the chain offered little insight into its current business performance despite a strong performance in the year to March 31.

Annual profits rose to almost £500 million, while revenue rose 10% to £5.5 billion, but there were signs of a slowdown in growth in the first three months of 2024.

Analysts at Investec said a forecast of B&M’s performance over the past few weeks would have been helpful as the company has lagged behind comparables.

In a research note titled “More Questions Than Answers,” they added: “At the same time, it is disappointing that gross margin momentum appears to have slowed despite management’s focus on ‘controlled, profitable revenue growth.'”

B&M plans to open at least 45 more stores in the UK this year and another 45 the following year, continuing its march to 1,200 stores across the country. Last year, 47 stores were opened, including 21 former Wilko stores that B&M bought when its rival went bankrupt.

The share price lost 5.6% today to 515 pence, putting it in the red again since the beginning of the year.

B&M CEO Alex Russo said: “Financial year 2024 was another good year for B&M. The three key components of our business – purchasing, logistics and retail – are working in balance and we continue to deliver great products to our consumers at consistently low prices. We are well positioned for the years to come.”

“We have demonstrated strong volume-driven momentum in our business throughout our trading history and this has continued, driving our profits ahead of both pandemic and pre-pandemic benchmarks. Despite the more challenging comparables, continued new store openings and focus on low prices and best-in-class retail standards, we remain confident about our cash generation and profit growth prospects.”