Shares of Liverpool-based B&M European Value Retail fell as much as 10% on Tuesday as its CEO said in a trading update that the firm’s operational execution “has been weak.”

B&M are down more than 40% for the past 12 months, trading around £2.35, cutting the firm’s stock market value to around £2.4 billion.

In a trading and operational update for the first half of its current financial year, relating to the 26 week period to September 27, 2025, CEO Tjeerd Jegen said: “Since becoming CEO in June, I have led the business through a comprehensive review of our customer proposition and operations.

“We have concluded that while B&M’s value proposition remains strong, our operational execution has been weak. This has impacted our first-half trading performance, and this is reflected in the full-year outlook that we publish today.

“Our response is a decisive plan, ‘Back to B&M Basics’, focused on returning the UK business to sustainable like-for-like growth. This is our absolute priority.

“We have already sharpened our price position, and we are moving with pace to refocus our ranges, improve on-shelf availability and bring back excitement to our stores. We have more work to do, but we are confident these changes will restore consistent like-for-like sales growth over time.”

In its update, the Liverpool firm said: “Group revenue grew +4.0% in H1 FY26 to £2,749m, primarily driven by B&M UK total value and volume sales growth, good trading momentum in B&M France and the addition of 31 gross and 15 net new stores across our three businesses (23 gross and 9 net in B&M UK, 5 gross and net in France, 3 gross and 1 net in Heron).

“B&M UK LFL sales grew by +0.1% in H1, with positive like-for-like (LFL) volume and value growth in General Merchandise offset by a decline in FMCG LFL sales.

“The timing of Easter and the early onset of good weather pulled forward demand for our General Merchandise outdoor ranges in early H1, driving double-digit LFL sales in April.

“Sales were weak in May as this trend reversed, following which we saw a progressive moderation in LFL sales declines in June and each period during Q2, helped by a return towards higher average value products in General Merchandise and some average selling price (ASP) inflation in FMCG.

“Despite this improving trajectory, B&M UK LFL sales declined by -1.1% in Q2, which was weaker than our expectations.”

On its “Financial Performance & Outlook” B&M said: “As communicated in our Q1 Trading Update, the gross margin for B&M UK in the first quarter was impacted by ASP deflation in General Merchandise and lower bought-in product margins.

“The negative effect of this price deflation moderated in the second quarter as we started to annualise these price changes and as new autumn/winter ranges were introduced with higher bought-in margins.

“Driven primarily by the LFL performance of B&M UK and lower trading gross margins across the first half, and subject to any final consolidation or audit review adjustments, the company expects to report group adjusted EBITDA (pre-IFRS 16) of approximately £198m in H1 FY26 (H1 FY25: £274m).

“This includes annual Extended Producer Responsibility tax costs of £14m (full annual cost expensed in H1), adverse FX hedge rate non-cash movements of £3m that will unwind in the second half, and higher wage costs due to the rise in national minimum wage and employer National Insurance (an impact of c.£30m before mitigation in H1).

“Our September 2025 leverage ratio (defined as Net Debt divided by Group adjusted EBITDA (pre-IFRS 16 basis)) will be slightly above our 1.0-1.5x target range, reflecting lower earnings and seasonal working capital peaks ahead of our Golden Quarter trading period.

“We are taking decisive actions to correct the operational weaknesses identified. While the full financial benefits will build over time, we have seen gradually improving trends in UK like-for-like sales and gross margins towards the end of the second quarter.

“Taking recent trading into account, and our expectation of an improving LFL trajectory from Q2 levels, Group adjusted EBITDA (pre-IFRS 16) is likely to be in the range of £510m-£560m for FY26.

“Given the visibility available on operating costs and trading margins, we expect B&M UK’s LFL sales will be the principal driver of the outcome within this range, for which we assume a second-half UK LFL percentage growth rate of between low-single-digit negative and low-single-digit positive levels.

“The full impact of Back to B&M Basics actions will take 12-18 months to take effect, but we are confident they will restore B&M’s value proposition and support a return to sustainable LFL sales growth for B&M UK.

“With LFL growth, future adjusted EBITDA profit margins are expected to stabilise at least at the FY26 outturn level.

“Back to B&M Basics is part of a broader strategy to improve trading, deepen B&M’s foundations and accelerate growth. We look forward to sharing more details in our Interim Results presentation on 13th November.”