Slumping B&M shares hit record lows following lackluster sales growth that fell short of investor expectations.
In a disappointing turn of events, B&M's share price has fallen to an all-time low, following a series of lacklustre financial updates and meagre sales growth. The 13-week sales period for B&M ended on June 28, during which the company experienced a decline in sales of fast-moving consumer goods, such as packaged food and cleaning products.
The new boss of B&M, Tjeerd Jegen, who took up the position last month, has hinted at a major overhaul before the Christmas period. Despite a slight improvement in like-for-like sales, which rose by 1.3% in B&M UK during the first quarter, this growth was significantly below market expectations of 2.6%.
The company's overall sales increase was largely driven by the opening of new stores rather than organic growth, which raises concerns about sustainability. Heron Foods, another segment of the company, reported a decline in revenues despite an increase in store count, further contributing to investor concerns.
B&M's core customer base, lower-income consumers, are hesitant to spend due to limited real wage growth and a challenging UK retail trading environment, as previously mentioned by the company last month. This situation has put pressure on margins, leading to further deterioration in the company's financial performance.
The decline in sales of fast-moving consumer goods at B&M was reported by the company, and shares closed down 9.1% at 234.3p on the back of these disappointing updates. Despite the new leadership and improved sales figures, the company's inability to meet market expectations and the broader challenges in its core markets have led to investor skepticism and a decline in share price.
[1] Market expectations for B&M's sales growth were 2.6%, but the company only reported a 1.3% increase. [2] B&M's sales growth in France was even weaker at 1.1%, and Heron Foods reported a decline in revenues despite an increase in store count. [3] The company's overall sales increase was largely driven by the opening of new stores rather than organic growth, raising concerns about sustainability.
[1] Despite a slight improvement in like-for-like sales, which rose by 1.3% in B&M UK during the first quarter, this growth was significantly below the anticipated 2.6% identified in the investing world, suggesting a disappointing financial performance for the company in regards to its stocks and business.
[2] The disappointing sales growth was not limited to B&M UK, as the growth in France was even weaker at 1.1%, and Heron Foods, another segment of the company, reported a decline in revenues despite an increase in store count, further contributing to the skepticism within the finance and investing communities.
