FTSE 100-listed B&M European Value Retail S.A. (GB:BME) is rewarding its shareholders with a 20p per share special dividend thanks to solid sales in the Christmas season. The dividend will be paid on February 9 to shareholders on record as of January 19. The dividend announcement comes as the retailer released its Q3 FY24 trading update. B&M boasts a dividend yield of 2.7%, higher than the sector average of 0.99%.
Popularly known as B&M, the company operates discount retail stores across the U.K. and Germany. B&M provides a broad range of items, including food, housewares, home textiles, small electrical goods, DIY products, garden-related products, groceries, toys, and more. BME shares have gained 34.7% in the past year.
B&M’s Trading Update
For the 13 weeks ended December 23, 2023, B&M’s revenue grew 5% year-over-year to £1.65 billion, backed by solid holiday sales. For the nine months ending December 23, B&M reported revenue of £4.19 billion, up 8.1% year-over-year.
For B&M U.K., the like-for-like revenue for the 14 weeks ending December 31, 2023, was 1.2%, a rather dull number compared to the first-half growth rate of 6.2%. Even so, CEO Alex Russo said that the comparative prior-year period was a relatively stronger base and he is happy with B&M’s quarterly performance.
At the same time, B&M reaffirmed its outlook for adjusted EBITDA to fall between £620 and £630 million for Fiscal 2024, compared to £573 million in the previous fiscal year. Further, the retailer is on track to open 76 gross new stores in 2024, with 45 in B&M U.K., 11 in B&M France, and 20 under the Heron Foods brand. B&M is scheduled to report its full-year Fiscal 2024 results on March 30, 2024.
What is the Price Target for B&M?
Following the trading update, Jefferies analyst Andrew Wade reiterated a Sell rating on BME stock with a price target of 380.00p, implying 31.8% downside potential from current levels.
Overall, BME stock has a Moderate Buy consensus rating on TipRanks based on seven Buys, one Hold, and two Sell ratings. The B&M European Value Retail S.A. share price forecast of 604.30p implies 8.4% upside potential from current levels.
