LONDON (Reuters) - Britain’s B&M emerged as a winner in the battle for Christmas trade on Wednesday, as its value-focused seasonal ranges attracted shoppers cautious about their economic prospects.
B&M European Value Retail (BMEB.L), which sells products ranging from toys to soft furnishings from 533 stores in Britain and 73 stores in Germany, said it had a record Christmas, with total group sales up 20.5 percent in its third quarter.
Its strong showing contrasted sharply with a disappointing performance by clothing retailer Next (NXT.L) that highlighted “exceptional” levels of uncertainty in the sector.
Shares in B&M rose 7.5 percent in early deals to trade at 299 pence, their highest level since Britain voted to leave the European Union in June.
B&M’s Chief Executive Simon Arora said the general merchandise group’s performance showed the strength of its value-based offer.
“We have delivered our best ever Christmas trading and served over 5.5 million customers in a single week in the UK alone as we continue to gain market share,” he said.
“Our German business Jawoll has also performed well and our first steps towards a faster pace of expansion are going to plan.”
The company reported total group revenue of 789.1 million pounds for the quarter, up 20.5 percent in constant currency, including a 7.2 percent rise in UK like-for-like revenue.
Broker Peel Hunt said it had expected an improvement this Christmas after B&M fixed problems with disruption at the warehouse and understocking in 2015, but trading turned out to be way above the market and possibly B&M’s own expectations.
“Discounters, of course, always do well when there is a little bit of uncertainty in shoppers’ minds, and if life does get a bit tougher in 2017, B&M will continue to take share,” it said.
B&M said it was confident it would meet market expectations for adjusted core earnings in the financial year to March 2017, which currently stand at 232 million pounds, based on nine analysts.
British consumer borrowing grew at its fastest rate in more than 11 years in November, Bank of England figures showed on Wednesday. But economic growth is expected to slow this year and the central bank has warned that some households are highly indebted and might struggle as unemployment rises.
Editing by Sarah Young and Adrian Croft