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Investing.com -- B&M European Value Retail SA (LON:BMEB) shares plunged more than 15% on Tuesday after the company reported lower first-half profit, trimmed its full-year earnings outlook and announced a turnaround plan to revive weak UK trading.
The discount retailer reported group revenue of £2.75 billion for the first half of fiscal 2026, up 4% from a year earlier, with growth driven by its UK and French operations.
The UK division, which remains B&M’s largest, generated £2.2 billion in revenue from March 30 to Sept. 27. Like-for-like sales rose just 0.1% in the first half but fell 1.1% in the second quarter, weighed down by soft demand for fast-moving consumer goods (FMCG), partly offset by stronger sales in general merchandise.
In contrast, French stores posted a 5.2% increase in like-for-like sales and a 19.4% rise in second-quarter revenue, while Heron Foods saw revenue slip 1.4% in the quarter.
Chief Executive Tjeerd Jegen, who assumed the role in June, outlined a new “Back to B&M Basics” plan aimed at restoring consistent growth.
The strategy focuses on tightening product ranges, improving shelf availability, and sharpening pricing on key value items.
B&M has reduced prices on 35% of its FMCG key value lines and relaunched its “Managers Specials” promotions to reinforce its low-price positioning.
During the period, B&M opened 23 new stores in the UK, five in France, and three Heron Foods outlets.
The company also confirmed plans to redomicile from Luxembourg to the UK later this year, intending to simplify operations and allow greater capital returns.
Adjusted EBITDA for the half, pre-IFRS 16, fell to around £198 million from £239 million a year earlier, reflecting lower UK trading margins, about £30 million in wage inflation, and £14 million in producer responsibility tax costs.
The group now expects full-year adjusted EBITDA between £510 million and £560 million, assuming second-half UK like-for-like growth ranges from slightly negative to low single digits.
B&M’s leverage ratio at the end of September was slightly above its 1.0–1.5× target range, with the company citing weaker first-half earnings ahead of its traditionally strong “Golden Quarter.”
The retailer expects the effects of its operational reset to emerge gradually over the next 12 to 18 months.
B&M European Value Retail operates 786 stores across the UK and France, including 344 Heron Foods and B&M Express outlets.