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B&M has cut its full-year profit guidance despite reporting stronger sales towards the end of the Christmas trading period, as the discount retailer ramps up investment in pricing, stock clearance and operational changes.
In a trading update covering the 13 weeks to 27 December 2025, the group said it now expects adjusted EBITDA, before IFRS 16, for the 2025/26 financial year to be between £440m and £475m. That compares with previous guidance of £470m to £520m.
The retailer stated that the downgrade reflected deeper-than-expected investment in price, particularly in fast-moving consumer goods, alongside increased clearance of discontinued lines and weaker financial performance at its Heron Foods convenience chain.
Group revenue rose 2.9% year on year in the third quarter, or 2.6% at constant currency, taking year-to-date growth to 3.6%. In the UK, total revenue increased 1.9%, although like-for-like sales were down 0.6% overall for the quarter.
B&M said strong sell-through across seasonal grocery, giftware, toys and Christmas ranges helped drive December’s improvement, with positive like-for-like trends continuing into early January.
In France, B&M reported third-quarter revenue growth of 8.5%, with like-for-like growth of 0.4% in a competitive market. Heron Foods delivered total revenue growth of 1.4%, but like-for-like sales fell 0.1% and profit performance was below expectations.
The group said it was carrying out a further review of Heron’s customer proposition.
Gross margin at B&M UK remained below last year’s levels in the third quarter as the group continued to invest in price. It said this would continue into the fourth quarter as it accelerates the clearance of discontinued stock ahead of the next financial year.
The group continued under its “Back to B&M Basics” programme, which aims to simplify ranges, reduce stock-keeping units and improve on-shelf availability.
Early pilots to reduce FMCG line counts are expected to move towards a full rollout across the UK estate from the first quarter of the 2026/27 financial year.
B&M added that a third-party review by EY into its IT systems and balance sheet controls, commissioned after issues with overseas freight cost systems, has been completed and recommendations are now being implemented.
Tjeerd Jegen, chief executive of B&M, said: “We entered our Golden Quarter sharper on price to reinforce our value proposition with our customers. Price investment has continued, particularly in FMCG, and while the full benefits will take time to come through, I am encouraged by the early signs of like-for-like (LFL) sales growth at B&M UK late in the quarter.
“This includes the strong sell through of our seasonal ranges, which contributed to 3 percent UK LFL growth in December, with similar LFL trends continuing in early January trading…. I remain confident that the actions we are taking will restore sustainable LFL growth at B&M UK over the next 12 to 18 months and provide a strong foundation for future growth.”
