B&M European Value Retail (LON:BME) saw shares slump over 9% on Tuesday morning after reporting lacklustre first-quarter sales growth that fell short of market expectations.
The discount retailer said group revenue for the 13 weeks to 28 June rose 4.4% to £1.41 billion, helped by warm weather in April. UK sales rose 4.7% to £1.13 billion, while French operations delivered a stronger 7.6% increase to £136 million. Heron Foods, however, posted a 0.4% decline.
Like-for-like UK sales were up just 1.3%, well below analysts’ consensus of 2.6% compiled by Visible Alpha. Shares fell as much as 9% in morning trade, extending a bruising 12-month slide of nearly 50%.
Fast-moving consumer goods remained under pressure, with like-for-like sales in the category declining. June saw a modest pick-up in health & beauty and cleaning products, which the company attributed to better operational execution.
General merchandise provided a rare bright spot, with categories such as garden, toys and DIY performing well. However, B&M flagged average selling price deflation, which dragged on gross margins in some segments.
Chief Executive Tjeerd Jegen, who took the helm in May, said: “While B&M UK’s like-for-like sales are growing, I see a significant opportunity and requirement to sharpen our commercial and operational execution as we move towards and beyond the golden quarter.”
B&M said it will issue annual profit guidance alongside half-year results in November. The retailer also confirmed it remains on track to complete its redomicile to Jersey later this year, aiming to simplify its corporate structure and improve flexibility for shareholder returns.