B&M Value Retail on Tuesday said chief financial officer Alex Russo would be replacing Simon Arora as chief executive and warned that margins would take a hit this year as Britain’s cost-of-living crisis hit household budgets.
The company said UK like-for-like sales over the first eight weeks of the current financial year were down 13.2% and 11.5% against 2022 and 2021 respectively amid inflationary pressures which are forcing shoppers to cut back on non-essential items.
Group statutory profit before tax remained flat at £525m for the year to March 26, while adjusted core earnings were down to £619m from £626m.
B&M, which sells food, homewares and DIY products, said it expected markdowns to return and warned of a “adverse impact from category mix as customers shift spending away from more discretionary higher margin general merchandise categories” in favour of food and other consumer products.
As a result of this gross margin dilution, B&M UK adjusted core earnings margin is expected to fall between 70 to 130 basis points, it added.
Core profit this financial year was expected to be £550m – £600m, lower than last year but ahead of 2019 pre-pandemic levels.
“Given the uncertain macroeconomic outlook, it is difficult to predict the net impact of a number of factors such as customer down-trading, category mix shift and the impact of inflation on sales volumes,” B&M said.
