By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Viral Trending contentViral Trending content
  • Home
  • World News
  • Politics
  • Sports
  • Celebrity
  • Business
  • Crypto
  • Gaming News
  • Tech News
  • Travel
Reading: Down 40% in a year, could this be the next FTSE 100 comeback story?
Notification Show More
Viral Trending contentViral Trending content
  • Home
  • Categories
    • World News
    • Politics
    • Sports
    • Celebrity
    • Business
    • Crypto
    • Tech News
    • Gaming News
    • Travel
  • Bookmarks
© 2024 All Rights reserved | Powered by Viraltrendingcontent
Viral Trending content > Blog > Business > Down 40% in a year, could this be the next FTSE 100 comeback story?
Business

Down 40% in a year, could this be the next FTSE 100 comeback story?

By Viral Trending Content 4 Min Read
Share
SHARE
<p>Image source: Getty Images</p>

While most FTSE 100 stocks have enjoyed a powerful rally in 2024, the same can’t be said for B&M European Value Retail (LSE:BME). The discount retailer has seen more than 40% of its market-cap wiped out over the last 12 months on the back of slower growth.

Contents
Long-term growth potentialRisks and valuation

And with industry titans like Tesco taking more market share, investor confidence in B&M is seemingly dissipating. However, on closer inspection, this business might be on track for a solid comeback.

Long-term growth potential

2023 was a pretty exceptional year for B&M with tailwinds propping up its top and bottom lines. However, as we approached the first quarter of its 2025 fiscal year (ended in March), concerns started to rise about an imminent slowdown. Following the release of first quarter results, those fears turned out to be true.

Since then, results have continued to be a mixed bag, with overall sales across the first half of its 2025 fiscal year rising by a mediocre 3.7%. For reference, its 2024 fiscal year delivered closer to 10.4%. And while its expansion into France is still in its early days, seeing growth rates stumble from 26.1% to just 6.8% is obviously cause for concern.

However, this is where things start to get interesting. A key differentiating trait for B&M is the firm’s impressive profit margins. On an operating level, profitability currently stands close to 11.4%. That’s among the highest in the retail industry, crushing Tesco’s 4.6%. And yet, margins have continued to expand throughout 2024.

Management’s been steadily shifting its inventory towards general merchandise, growing the product portfolio to over 5,500 items. Almost all of which have higher gross margins versus its branded grocery products, driving profitability even higher.

So while revenues are currently sluggish, earnings continue to move in the right direction. And with trading volumes seeing a steady improvement throughout 2024, the company appears to be well-positioned to capitalise on the current Christmas holiday’s retail ‘golden quarter’.

Risks and valuation

On a forward basis, B&M’s price-to-earnings ratio currently sits at just 8.9. That’s less than half its 10-year average of 19.7 and firmly below the UK retail industry average of 16.8. Needless to say, if this growth slowdown’s just a temporary hiccup, the FTSE 100 stock seems primed for an impressive comeback story.

But what are the threats that could prevent this from happening? My biggest concern at the moment is less operational and more financial. Management’s been taking on significant debt over the last few years and recently announced another £250m bond offering.

The balance sheet‘s far from overleveraged. But borrowing at a time when interest rates are high is far less than ideal. Even more so, given its November 2023 £250m bond offer has an 8.125% rate attached to it. As such, the group’s interest expense is rising rapidly, which could undercut the gains made in operating profitability and reduce financial flexibility in the medium-to-long term.

It’s a risk investors will have to consider when looking at this stock. Nevertheless, with economic conditions improving and management’s shifting product strategy seemingly working, B&M’s comeback potential might make it a risk worth considering.

You Might Also Like

Corporate debt surge: Commercial paper issuances hit highest since April

Elon Musk defends $1 trillion pay package: ‘I just don’t feel comfortable building a robot army here and then being ousted’

7% dividend yield! Are passive income investors sleeping on Mondi?

Cheesesteak joint and commissary kitchen on Santa Fe gets started with $700k buy

GST rate cut to lift apparel retailers’ revenue growth by 200 bps, says Poonam Upadhyay

TAGGED: Investing
Share This Article
Facebook Twitter Copy Link
Previous Article Helldivers 2 players get a new sweet treat along with surprise DLC: melee weapons
Next Article Australia chases AI industry growth via new national capability plan
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

- Advertisement -
Ad image

Latest News

Anker’s Soundcore Select 4 Go Speaker Is Practically a Steal After Dropping to an All-Time Low
Gaming News
Corporate debt surge: Commercial paper issuances hit highest since April
Business
Ledger and Trezor 2025 hardware wallets released: What’s new for users?
Crypto
Binance Founder CZ Receives Presidential Pardon From Donald Trump
Crypto
White House Staffers Couldn’t Care Less About the East Wing Demolition
Tech News
CISA warns of Lanscope Endpoint Manager flaw exploited in attacks
Tech News
North Korean Hackers Lure Defense Engineers With Fake Jobs to Steal Drone Secrets
Tech News

About Us

Welcome to Viraltrendingcontent, your go-to source for the latest updates on world news, politics, sports, celebrity, tech, travel, gaming, crypto news, and business news. We are dedicated to providing you with accurate, timely, and engaging content from around the globe.

Quick Links

  • Home
  • World News
  • Politics
  • Celebrity
  • Business
  • Home
  • World News
  • Politics
  • Sports
  • Celebrity
  • Business
  • Crypto
  • Gaming News
  • Tech News
  • Travel
  • Sports
  • Crypto
  • Tech News
  • Gaming News
  • Travel

Trending News

cageside seats

Unlocking the Ultimate WWE Experience: Cageside Seats News 2024

Anker’s Soundcore Select 4 Go Speaker Is Practically a Steal After Dropping to an All-Time Low

Investing £5 a day could help me build a second income of £329 a month!

cageside seats
Unlocking the Ultimate WWE Experience: Cageside Seats News 2024
May 22, 2024
Anker’s Soundcore Select 4 Go Speaker Is Practically a Steal After Dropping to an All-Time Low
October 23, 2025
Investing £5 a day could help me build a second income of £329 a month!
March 27, 2024
Brussels unveils plans for a European Degree but struggles to explain why
March 27, 2024
© 2024 All Rights reserved | Powered by Vraltrendingcontent
  • About Us
  • Contact US
  • Disclaimer
  • Privacy Policy
  • Terms of Service
Welcome Back!

Sign in to your account

Lost your password?