B&M posted a -17% drop in pre-tax profits in the year to 25th March 2023, which it said were due to rising operational costs.
In its latest set of results, B&M has reported a drop in full-year profits, despite a slight increase in sales. The retailer said that despite shoppers seeking out cheaper alternatives, an area where B&M has performed well over recent years. the company has been forced to contend with rising cost pressures.
Pre-tax profits for B&M dropped -17% to £436m, down from £525m, in the year to 25th March 2023. Group sales increased slightly +6.6% over the period to £4.98b, which was +30.7% ahead of pre-pandemic levels. UK revenue increased +4% year on year, with like-for-like sales up +8.3% in the first nine weeks of the new financial year.
Chief executive Alejandro Russo attributed the drop in profits in part to “major economic headwinds and material cost pressures”, but added that the retailer had “weathered the difficult environment well”.
In a statement, he commented: “FY23 has been another year of strong underlying progress for B&M and the long-term future looks very positive. We are actively responding to the short-term pressure on consumers from the cost-of-living crisis, with a relentless focus on price and value.”
Financial expert, Susannah Streeter of Hargreaves Lansdown, said that B&M continued to benefit from a focus on frugality from consumers. She told This is Money: “B&M’s reputation as a discounter has served it well as consumers have scouted around for cheaper prices. Its large footprint in easy-to-access retail parks where parking is usually free has also been a bonus.”
Alejandro Russo added that the company expects to grow sales and profits in FY24, despite economic uncertainty. “A strengthened management team and the hard work of our 39,000 employees executing our unchanged strategy will help us deliver in the current financial year,” he said.
The retailer reported a sales rise during the Christmas quarter, resulting in the payment of a special dividend to B&M shareholders. In the UK, customer transaction numbers have increased every month since June, and B&M has seen 21 new store openings over the last financial year, alongside 15 closures and relocations, as the company strengthens its retail footprint.
