1Q20 Trading Update B&M reported its 1Q20 trading update with both group sales and UK B&M comps ahead of consensus. The highlights are as follows:

• B&M posted group revenue of £967.7 million, up 21.4% year over year as reported and on a constant-currency basis, and ahead of the consensus estimate of £934.5 million.
• The company opened 12 new B&M UK banner stores in the quarter and relocated one.
• It also opened six new value convenience Heron Foods stores in the quarter.

Segment Performance

• UK B&M banner revenues grew 13.8% year over year to £738.9 million, led by new store openings and strong comparable sales growth of 3.9%, beating the consensus of 3.5%.
• Heron Foods sales grew 8.1% YoY to £93.1 million with “solid” same-store sales growth.
• Jawoll revenues grew 1.9% year over year to £63.1 million, due to slightly negative comparable sales growth. The company noted that it witnessed strong comps in April and in recent weeks trading turned positive, benefiting from the hot weather. It also said that warehousing and logistics costs at Jawoll remain “challenging” but the company hopes to moderate them by the end of the first half of the current fiscal year.
• Babou sales were £72.6 million.

Simon Arora, Chief Executive, said:

The Group has made a solid start and we are on track with our plans for the year as a whole, with a strong performance in the B&M UK business and continued implementation of our planned change programs in Germany and France, with a continued focus on resolving the warehousing and logistics challenges in Jawoll. B&M had its third consecutive record Easter trading period with sales of seasonal products and Homewares performing particularly well and Heron Foods has traded solidly too. The transitional changes to the product offers in Jawoll and Babou are now taking shape, as we apply the B&M model to those businesses.

Outlook B&M plans to open 50 new B&M UK bannered stores and close five stores in fiscal 2020. It also expects to open between 15 and 20 new Heron Foods stores, net, in the year. The company believes it had a solid start to the financial year, and remains confident about the group's outlook and continued profit growth as the year progresses. In FY20, the consensus estimates by StreetAccount call for B&M to report revenues of £4.01 billion and EPS of 21.6 pence.