Ahead of B&M European Value Retail's first quarter update on Thursday, its shares have been edging back towards all-time highs on the back of last month's announcement that sales in the first nine weeks of the financial year were up by 8.3%.
Full-year underlying profits [adjusted EBITDA] are also set to be higher year-on-year, said the discount retailer.
Alejandro Russo, chief executive: “We expect to grow sales and profits in FY24, despite economic uncertainty.”
Deutsche Bank said the update put to bed any concerns about an easing of the trend towards 'trading down' and expects confirmation of healthy trading in Thursday’s update.
“Combined with this, management expects to see a degree of gross margin recovery from lower inventory clearance year-on-year, lower freight rates and better factory gate pricing,” the broker said.
While there has been “significant” sales volatility over the last few years, the broker believes B&M has capitalised on this.
Shares are up 38% this year to 569p.