B&M Shares Fall as Weak Garden Sales Drag Down Q1 UK Performance

Shares in B&M European Value Retail (LON:BMEB) fell by as much as 4% on Wednesday after the discount chain reported a decline in first-quarter like-for-like sales in its core UK market. The company attributed the drop to a slow start for its garden and outdoor categories against an exceptionally strong performance in the prior year.

Quarterly Performance Breakdown

In a trading update for the 13 weeks ending June 27, B&M said like-for-like sales in its UK business fell by 2.3%. The company explained this was largely due to a tough comparison with the same period last year, when unusually warm and dry weather had boosted like-for-like garden sales by 10.9%.

Despite the like-for-like decline in the UK, overall group revenue saw modest growth, supported by a strong performance in France. Key figures for the quarter include:

• Group Revenue: £1.43 billion, an increase of 2.0%.
• B&M UK Total Revenue: £1.14 billion, up 0.3%.
• B&M France Revenue: £156 million, a rise of 14.6%, with like-for-like sales up 5.3%.
• Heron Foods Revenue: £142 million, an increase of 2.8%.

Management Commentary and Outlook

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Chief Executive Officer Tjeerd Jegen described the first quarter as the company's "seasonally most variable for sales," highlighting the challenging comparison created by last year's weather. However, he noted that general merchandise like-for-like sales returned to growth in May and June, and that garden and outdoor inventories ended the quarter at "normalized levels."

The company also stated that its UK margin on fast-moving consumer goods (FMCG) remained under pressure as it continues to invest in price competitiveness. In contrast, general merchandise margins were higher than last year. B&M said it expects overall year-on-year margin improvement as it introduces its autumn and winter product ranges.

Analyst View

Analysts at Jefferies, who rate the stock as "hold," described the update as a "slow start to FY27" but noted the results were largely anticipated. In a note to clients, they said the 2.3% UK like-for-like sales decline was "broadly in line" with their forecast for a 2.0% drop.

The analysts agreed that the performance was heavily influenced by the strong, weather-driven comparison from the previous year. They concluded that the update was "very much as expected" and saw "little here to suggest any change to consensus" forecasts for the company.