British discount retailer B&M has reported lower like-for-like revenue in its UK business in the first quarter of fiscal 2025, saying wet weather dampened demand for seasonal items.
CEO Alex Russo, however, told analysts B&M had been "conservative" in its gardening inventory purchase in the past nine to 12 months, helping it exit the first quarter without the risk of having to lower prices.
"We basically exited Q1 clean (on stock levels) ... and basically (that) has allowed us to remove any downside on profitability on what has clearly been a challenging spring/summer," he said.
B&M, which sells everything from garden furniture and electrical items to toys and food, said its UK like-for-like revenue fell 5.1% in the quarter ended 29 June. Excluding the timing of the Easter holiday this year, it was down 3.5%.
Loyalty Programme
"B&M's lack of a loyalty programme could be a disadvantage compared to its rivals," Third Bridge analyst Orwa Mohamad said.
Discount chains have seen a stronger push back from big supermarket groups such as Tesco and Sainsbury's use of loyalty cards.
B&M had unsettled analysts in June due to a lack of forecast after it reported annual results.
On Tuesday it said it expects profitable cash generating growth across this fiscal year.
'The FY25 outlook separately remains rather vague,' JPMorgan analysts wrote in a note.
Quarterly Performance
Group revenue, however, grew 2.4% to £1.35 billion ($1.75 billion) in the three months ended 29 June, helped by higher volumes and store openings across its three businesses, including B&M France.
"Ahead of the second-quarter, we have launched our Everyday Value range with more than 500 new lines in core categories across home, electrical and pet in the UK and France," Russo added.
Surveys published last week showed British consumer spending contracted in June, with wet weather hitting sales of key seasonal areas such as do-it-yourself and gardening, footwear and food.
However, the consumer outlook is improving, with lower UK inflation, rising real living standards and possible interest rate cuts on the horizon.
