3Q19 Trading Update Mixed-goods discounter B&M reported a further weakening in its U.K. core in 3Q19, ended December 29, 2018. During the quarter:

• B&M U.K reported a 1.6% decline in comparable sales, below the 0.9% growth in first half and missing the Street Account consensus of a 0.2% decline.
• After what the company called a “difficult November,” December B&M U.K. comps strengthened to 1.2%, while U.K. same-store cash gross margin was down in November but bounced back in December.
• Group sales grew 12.1% year over year to £1.09 billion, slightly above the consensus of £1.08 billion, while total U.K. sales grew 4.5% year over year to £874.5 million.
• B&M’s Jawoll chain in Germany grew revenues 5.5% at constant currency, while its Heron Foods chain in the U.K. grew revenues 12.6%.

Strong inventory management resulted an estimated 30-basis-point expansion in the gross margin over the quarter. The company said the positive sales momentum seen at B&M U.K. in December has continued into January. B&M U.K. opened a net 20 new stores in the quarter and remains on track to open 56 gross new stores in FY19. In the quarter, Heron Foods opened nine stores and Jawoll opened three stores. Outlook The company did not provide quantitative guidance for FY19 but said in its trading statement, “Our January period has started well, and we are well positioned for the remainder of the financial year. Our pipeline of new stores is healthy, and we remain on track to deliver continued sales and earnings growth this financial year and the next.” For FY19, analysts expect B&M to report revenues of £3.5 billion, up 15.1% year over year, and net profit of £197.4 million, up 6.2% year over year, according to S&P Capita IQ.