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Discounter B&M sees profit above estimates on strong UK margins

By Reuters

– Discount retailer B&M forecast first-half profit well above market estimates on Wednesday, thanks to stronger-than-expected margins at its UK stores.

Shares of the FTSE 100 firm rose about 4.4% to 564.6 pence, putting it at the top of the blue-chip index.

The company said it expects adjusted core profit for the 26 weeks ending Sept. 25 to be between 275 million pounds and 285 million pounds ($378 million to $392 million), well above analysts’ consensus estimate of about 235 million pounds.

That, however, is below 295.6 million pounds in the year-ago period marked by the pandemic.

The retailer, which sells everything from food to homewares, do-it-yourself and gardening products, however, cautioned that trading patterns and strength of customer demand remain highly uncertain for the rest of the fiscal year.

B&M in July reported a fall in quarterly underlying sales, reflecting a very tough comparison with the same period last year when shoppers stocked up for the first COVID-19 lockdown.

The group, which also trades as Heron Foods in the UK and has a business in France, has performed well during the pandemic. Its stores were allowed to stay open through multiple UK lockdowns because they sell some food, and its low prices and out-of-town locations chimed with consumers.