B&M side-steps clouds gathering over retail stocks
B&M has side-stepped the overall gloom surrounding retail stocks this morning, rising over seven per cent in morning trading after a strong trading update.
Other retail stocks – including Marks and Spencer's, Debenhams' and Associated British Foods' – have taken a hit today after Next tumbled 11 per cent at the open.
Read more: Next reports Christmas sales slump and warns of Brexit price rises
Budget retailer B&M, however, said this morning that its UK like-for-like sales rose 7.2 per cent between the 25 September and 24 December. This total was boosted by 1.1 per cent due to the extra day of shopping before Christmas.
Group revenue was up 20.5 per cent on a constant currency basis.
Simon Arora, B&M's chief executive, said: "We have once again demonstrated the strength, relative appeal and popularity of our model at a time of uncertainty for consumers generally and continuing structural change in the retailing sector.
"We have delivered our best ever Christmas trading."
Read more: Retailers' share prices dragged down as Next sinks
The same positivity could not be found in Next's camp this morning. The retailer said prices will rise for its customers by up to five per cent this year due to inflationary pressures, and that this would ultimately drag on sales.
In addition, extra costs such as the rising national living wage, the apprenticeship levy, and more, will be causing problems for Next this year.
Retail analyst Nick Bubb said:
When we saw an update from B&M flash up on the screen just before Next we feared for the worst, as B&M was not due to report until next week.
But good news comes early and B&M clearly couldn't wait to tell the City that it had a surprisingly strong final quarter.