By Geoffrey Smith
Investing.com -- B&M European Value (LON:BMEB) stock rose in early trading on Thursday after the discount retailer beat expectations in the holiday season, raised its guidance and announced a special dividend.
The group said it now expects its underlying operating earnings to be in a range between £560 million and £580 million (£1=$1.201), marginally above consensus forecasts of £557M.
As such, it intends to pay out £200M through a 20p/share dividend at the end of January.
B&M, which operates discount stores in the U.K. and France, said revenue was up 12.3% in the three months through December, the third quarter of its fiscal year, at £1.567B, thanks to what it called "very good performance across all B&M U.K. categories, both in grocery and general merchandise."
Around half of the growth was due to acquisitions and new store openings. Like-for-like sales were up 6.4%, a little behind the rate of inflation, suggesting that sales volumes had declined somewhat.
B&M was one of three U.K. retailers to report better-than-expected figures on Thursday, alongside fashion chain Next (LON:NXT) and bakery Greggs (LON:GRG) which contrasted with the steady flow of negative macroeconomic newsflow in recent months as the U.K. economy has slid into recession.
The numbers still suggest that B&M has been a relative winner as raging inflation and a surge in energy bills has forced shoppers to seek out bargains wherever they can. Sales at its smaller French operations grew twice as fast, by nearly 25% on the year, but still represented less than 10% of overall revenue, a reminder that the pressure on household budgets is by no means limited to the U.K.
Chief Executive Alex Russo, who took over the job only four months ago, said that "The business has exited the quarter well and will remain focused on disciplined execution.”
By 04:00 ET (09:00 GMT), B&M stock was up 2.0%, having hit an eight-month high at the opening in response to its news.
Begin trading today! Create an account by completing our form
At One Financial Markets we are committed to safeguarding your privacy.
Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.
Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.
Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.
By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.