Shares of &M fell 12% this morning after the discount retailer posted lower sales and profits as it battles continued cost inflation and supply chain woes.
The company’s revenue fell 2.7% in the year to March 2022 to £4.7bn, while pre-tax profits fell 3% to £524m, with society failing to keep pace with the pandemic boom it encountered last year.
Chief Financial Officer Alex Russo will replace CEO Simon Arora, the company announced, marking the end of Arora’s 18-year tenure at the helm of the company.
Arora said: “The retail sector faces inflationary pressures as our customers grapple with a significant increase in the cost of living, which makes spending behavior in the year ahead difficult to predict. provide.
“However, we have already seen that during these times customers are increasingly looking for value for money, and B&M is uniquely placed to meet these needs.”
Ross Hindle, analyst at business intelligence firm Third Bridge, said: “Despite a challenging shopping landscape, discounter B&M should benefit from the cost of living squeeze as shoppers fall.
“Compared to category specialists, B&M is nimble enough to change product offerings when it can’t make an item work at a given price. Our experts expect a mix shift towards groceries and away from general merchandise, which will ultimately hurt margins. »
Arora bought the discount chain with his brother Bobby in 2004, transforming it from a struggling regional brand into a retail goliath.
Arora controls a 7% stake in the company worth £287m, according to Bloomberg data. He sold a £234m stake in the company in January before announcing he was stepping down as CEO in April.
The company now operates 1,100 stores, including more than 100 in France, under the B&M and Heron Foods brands.