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Why the Beacon Lighting (ASX:BLX) share price is rocketing 22% higher

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The Beacon Lighting Group Ltd (ASX: BLX) share price is rocketing higher on Friday following the release of its first quarter update.

At the time of writing the retailer’s shares are up a massive 22% to a two-year high of $1.73.

How did Beacon Lighting perform in the first quarter?

As you might have guessed from the share price reaction, Beacon has been performing very strongly in the first quarter. Management notes that retail trading conditions have been supportive of the lighting and fan product categories, with strong growth being exhibited across all Australian markets except for the Melbourne region.

Due to lockdowns, the company’s Melbourne stores have been closed to retail customers since 6 August 2020. However, the company has made use of these stores to process online orders, Click & Collect contact-free pickups, and service trade customers.

For the three months ended 30 September, Beacon Lighting reported a 24.3% increase in sales.

This was driven by same store sales growth (including Melbourne) of 26.6% or 37.6% (excluding Melbourne).

Also supporting its strong sales growth was its online business and international sales. During the quarter, Beacon’s online sales grew by a whopping 156% over the prior corresponding. International sales increased 42%.

This ultimately led to the company’s first quarter underlying net profit after tax (excluding Beacon Energy Solutions) almost tripling compared to a year earlier. Beacon Lighting reported a profit of $8.4 million, up from $2.2 million.

“Strong results.”

Beacon Lighting’s CEO, Glen Robinson, appeared to be very pleased with the first quarter.

He said: “During these difficult times we have been able to provide our customers across Australia with a safe and rewarding shopping experience in our stores and online. We are seeing many customers investing in their home as they spend more time at home working and studying. Thanks to the support of our customers and the commitment of our team members, the Group has been able to achieve these strong results.”

And while no guidance has been given for the year ahead, Mr Robinson commented that the company “is looking forward to a successful year in FY2021.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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