B&M has issued a fresh profit warning, as its Back to B&M Basics turnaround plan cuts into margins.
Issuing its third quarter results this morning, the discounter slashed its adjusted EBITDA forecast from £470m-£520m to £440m-£470m after like-for-like sales at B&M UK fell 0.6% in Q3 and investments in price and stock clearance bit.
“As we progress Back to B&M Basics, we are identifying opportunities to make deeper investments in clearing discontinued lines to support planned reductions in SKU count and to clean up stock as we restore on-shelf availability towards industry benchmarks,” sadi B&M CEO Tjeerd Jegen, who joined the chain in June 2025 to revive its fortunes.
“As with our pricing actions, these are investments in the long-term strength of B&M, but they do impact near-term financial performance. As a result, we are revising our full-year guidance downwards to reflect these actions and the financial underperformance at Heron.”
Group revenues were up 2.9% in the 13 weeks to 27 December, with B&M France’s rapid footprint expansion powering 8.5% growth to £186m on the continent despite like-for-like sales growth of 0.4%.
In the UK, B&M’s sales were up 1.9% despite a fall in like-for-like sales, reaching £1.4bn in the quarter, and £3.6bn in the year to date.
Christmas trading was significantly stronger than the rest of the quarter, as a “sharper” price proposition and “strong sell through” of seasonal ranges brought like-for-likes up to 3% in December. Early January trading has seen the bump in like-for-like sales growth continue.
“The reset we are driving through Back to B&M Basics is necessary to rebuild the long-term value of the business and these workstreams continue to progress at pace,” added Jegen.
“Actions on fmcg SKU count and on-shelf availability are now moving out of their initial pilot phases and towards implementation across all stores later this year. I remain confident that the actions we are taking will restore sustainable like-for-like growth at B&M UK over the next 12 to 18 months and provide a strong foundation for future growth.”
Subsidiary Heron Foods’ performance fell “below expectations”, with total revenue growth of 1.3% to £138m in the quarter, and a 0.1% contraction in like-for-likes.
While group sales were “in line with expectations” and like-for-likes better than expected, the group needs to restore investor confidence by producing like-for-like growth without any further cuts to profit guidance, according to RBC analyst Richard Chamberlain.
“B&M has a strong track record on buying and offers SKU discipline and tight cost control,” he said.
“B&M should benefit from consumers remaining value conscious and should have some runway for growth given it has only 2% share of UK retail overall. However, recent LFL trends have been subdued, and we think B&M still needs to convince in terms of value for money perception, what its sustainable margin level should be, and earnings visibility and reliability given recent downgrades to full-year EBITDA guidance.
“We think the new CEO’s strategy is credible, with the main risk being that it takes longer to come through than B&M expects.”
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