3 Major Results in One Day – and the Market Reacts Negatively to All of Them
A closer look at the latest updates from B&M, M&S, and Greggs
Dear Reader,
Three major companies have released their trading updates, but the market hasn’t taken to them kindly. In this article, I’ll delve into the results from B&M (-8.61%), M&S (-8.07%), and Greggs (-15%), all announced today (9 January 2025).
What’s striking is that all three reported growth—from Greggs’ impressive 11.3% rise in total sales to B&M UK’s more measured 3.3% revenue growth. That said, it’s clear the recent UK budget has taken a toll on investor confidence in the domestic market.
The Chancellor sent business confidence into a tailspin with a £25bn National Insurance tax raid. Her plans raised a record £40bn in tax overall – but she none the less startled markets by still depending on extra debt1. - Tim Wallace (The Telegraph)
B&M European Value Retail SA (FTSE 250)
Revenue Performance
Group Revenue: YTD growth of 3.5% (constant currency) and 2.8% for Q3.
B&M UK saw a 2.8% total revenue increase but a (2.8%) LFL decline in Q3, though positive LFL growth in December.
B&M France performed strongly, with 12.5% growth in Q3.
Heron Foods declined by 5.6% in Q3, contributing to a 1.2% YTD decrease.
Operational Highlights
Strong seasonal sales in B&M UK, particularly in Confectionery, Toys, and Christmas Home ranges.
B&M France continued its positive performance with 3.8% LFL growth.
Heron Foods faced challenges, though the causes weren’t detailed.
Expansion Plans
The Group plans to open 73 new stores in FY25, with 45 in B&M UK, 11 in B&M France, and 17 in Heron Foods.
Financial and Capital Return
The Board has declared a special dividend of 15.0p per share (totaling £151m), payable on 14 February 2025.
Profit guidance for FY25 was narrowed to an expected adjusted EBITDA range of £620m to £650m.
CEO Commentary
Alex Russo emphasized operational discipline and the focus on delivering value to customers. The Group is on track to achieve its growth targets, with a strong return on capital supporting continued profitability.
Analysis
B&M presents plenty of positives, and I like the business overall. From growth to dividends, the fundamentals look promising. It seems the entire retail sector experienced weaker-than-expected sales over the Christmas period, but for me, B&M appears well-positioned for growth—especially as consumers tighten their belts following the fallout from the disastrous budget.
Strong numbers and a healthy dividend stand out, despite the lower guidance and ongoing challenges at Heron Foods. To me, this reaction seems overdone.
In summary, B&M's results highlight growth in key areas, particularly in France, alongside continued challenges in Heron Foods. However, the company’s commitment to expansion and capital returns underscores its potential for future success.
Marks and Spencer Group Plc (FTSE 100)
Sales Performance
Food and Clothing, Home & Beauty figures are at reported sales. International and Group sales are at constant currency. Ocado Retail sales are reported separately.
Operational Highlights
Food
Sales increased by 8.7%, with LFL growth of 8.9%, maintaining UK volume growth of 6.6% into the Christmas period.
M&S was the top-performing store-based grocery retailer in volume and value during the period.
500 new lines were introduced, driving a 14% growth in new Christmas product sales.
Core categories like meat, produce, grocery, and in-store bakery saw double-digit growth.
Innovations such as Gastropub ranges provided affordable alternatives to dining out.
Supply chain investments improved availability but highlighted challenges in managing increased seasonal volumes.
Clothing, Home & Beauty
Sales rose 1.0%, with LFL growth of 1.9%, outperforming a declining market.
Adjusted for the exit of the bulky furniture category, underlying sales grew 2.6%.
Online sales increased by 11.7%, accounting for 34% of total sales, up from 31% last year.
New and renewal stores exceeded performance expectations.
Stock management remains a focus, with plans to reduce option count and increase full-price sell-through.
International
Sales fell 2.8%, mainly due to tough market conditions in India and phasing issues with franchise shipments.
Reset actions are in progress, with confidence in medium-term growth opportunities.
CEO Commentary
Stuart Machin, Chief Executive, expressed satisfaction with the strong performance across key segments:
Food benefited from quality, innovation, and value, making M&S a go-to destination for everyday and festive shopping.
Clothing, Home & Beauty capitalized on core categories like denim and knitwear while growing market share.
Despite challenges, M&S is committed to accelerating its transformation, leveraging digital and modernizing supply chains.
Machin emphasized M&S’s readiness to adapt to economic pressures while continuing to deliver quality and innovation to meet customer needs.
Outlook
Amid ongoing economic uncertainty and cost pressures, M&S remains focused on what it can control. The company has reaffirmed its half-year guidance from November and expresses optimism about maintaining progress through the remainder of the fiscal year.
With robust growth in the UK and some challenges in India, M&S continues to demonstrate its strength as a diversified brand. Its portfolio remains impressive, and let’s not forget—M&S clothing is absolutely top-tier!
Greggs plc (FTSE 250)
Sales Performance
Operational Highlights
Trading Performance
Total FY24 sales reached £2,014 million, up 11.3% year-over-year.
LFL sales growth in company-managed shops for FY24 was 5.5%, with 2.5% growth in Q4 reflecting more subdued High Street footfall.
Greggs maintained its market share of visits, remaining the #1 destination for breakfast despite challenging consumer confidence.
Popular seasonal items like the Festive Bake, Vegan Festive Bake, and Festive Flatbread saw high demand.
The pizza offering continued to grow, with bundle deals gaining popularity for evening consumption.
Shop Estate and Supply Chain Development
Record 226 new shops opened in 2024, offset by 28 closures and 53 relocations, resulting in 145 net new openings.
Total shops trading reached 2,618, with 2,057 company-managed and 561 franchised units.
Over-ice drinks were rolled out to 1,100 shops, surpassing the initial target of 700 shops.
Significant supply chain investments included:
Ongoing construction of a frozen product facility in Derby, set to open in 2026.
National Distribution Centre in Kettering, with construction commencing shortly and expected completion in 2027.
CEO Commentary
Roisin Currie, Chief Executive, celebrated surpassing the £2 billion milestone in sales and credited Greggs’ value-for-money offering for its resilience:
"2024 was another year of good progress by Greggs, with a record number of new shops opened and the £2 billion sales milestone surpassed. Despite subdued consumer confidence, our focus on quality, affordability, and innovation positions us well for growth."2
Currie also highlighted plans to continue shop expansion, enhance digital capabilities, and broaden the menu, including a strong pipeline of 140-150 new shop openings in 2025.
Financial Position and Outlook
Greggs ended 2024 with £125 million in net cash, down from £195 million in 2023, reflecting investment in growth and capacity.
The Board expects the FY24 financial outcome to align with previous guidance.
Employment costs are expected to rise in 2025, but Greggs plans to offset this with continued cost management and retention of its value leadership.
Outlook
Despite the current challenges, Greggs is confident about making further progress in 2025, supported by ongoing investments in its supply chain, menu innovation, and shop expansion. The growth Greggs has achieved in recent years has been nothing short of impressive.
Every time I pop into a Greggs, there’s always a queue—a clear sign of how well-loved it is. With locations in petrol stations and along busy roads, Greggs has nailed its strategy. I really like the business and its figures; it’s a solid operation with plenty of potential ahead.
Thanks for reading,
Ollz
The information provided in this article is for informational purposes only and reflects my personal opinions and analyses. It should not be considered financial advice or a recommendation to buy or sell any securities. Investing in the stock market involves risks, and past performance is not indicative of future results. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making any investment decisions. I do not assume any responsibility for any financial losses or consequences that may arise from reliance on the information provided herein.
https://www.telegraph.co.uk/business/2025/01/09/labour-spending-promises-tipped-britain-into-crisis/
https://www.londonstockexchange.com/news-article/GRG/q4-trading-update/16844161