B&M European Value Retail (LON:BME) has reported strong revenue growth in the first quarter of its financial year, however growth in its like-for-like (LFL) sales faced a tough comparable from the previous year.
The FTSE 250-discount retailer said in a trading update that group revenue growth for the quarter was 21.4% compared with 17.2% growth in the same period a year ago, with actual revenue at £796.3mln compared to £656.3mln in the first quarter of 2017.
However, the group also said LFL UK revenue growth was at 1.6% for the first quarter, down significantly from the 7.3% growth rate for the same period a year ago.
B&M added that it had opened four new B&M UK stores in the quarter as part of a new store opening programme that was being weighted toward the second half of the financial year, with 45 net new stores planned to open this year.
The group also planned to open between 15-20 new stores of its Heron convenience store chain and 10 stores for its Jawoll division in Germany.
The firm noted that Jawoll had been performing well in the period, with revenue growth of 7% and new management driving a fast pace of change in the customer offer ahead of it Autumn and Winter season.
Simon Arora, B&M chief executive, said: "The business has performed strongly in the quarter despite demanding comparables of +7% LFL's in the previous year and a sluggish market environment. Our competitively priced ranges for Garden and Outdoor Leisure have been very well received and they are achieving great rates of sell-through.”
In a note to clients, analysts at City broker Liberum commented that a conference call with B&M'S managers had "exuded a confident tone ...[which] alongside continued strong trading and strategic progress leaves us very comfortable reiterating our Buy [rating].
The broker added that B&M's higher footfall rate was "particularly encouraging" as it stood in "stark contrast to reporting elsewhere in the sector" and reflected the company's "value focus and broad, flexible product offer, which is supported by its well-invested, agile supply chain".
In early trading Thursday, B&M shares were up 2.2% at 423.7p.
-- Adds broker comment and updates share price --