B&M profits slump as price cuts fail to woo shoppers
B&M has reported a slump in full-year profits as price cuts failed to woo shoppers even as higher costs weigh on households.
The retailer, which has suffered a prolonged period of underperformance, reported a larger-than-expected drop in profits in the 12 months to 30 March.
Pre-tax profits plunged by 47 per cent to £227million, down from £431million the year before. Meanwhile, adjusted earnings of £459 million came in at the midpoint of recent guidance.
The beleaguered chain pointed to lower margins as it pushed to compete on price as part of its turnaround efforts.
Last autumn, B&M launched its ‘back to basic’ transformation plan, which included, among other measures, cutting prices on 35 per cent of its key items to return to like-for-like sales growth in the UK.
B&M launched its ‘back ot basic’ transformation plan last autumn to return to sales growth in the UK
B&M also reported higher costs related to wages and environmental levies ‘that challenged us’.
It warned the conflict in the Middle East would continue to heap pressure on fuel and energy costs, which it said it could mitigate through ‘internal cost-saving initiatives’.
Chief executive Tjeerd Jegen, who joined in June 2025, said it had been ‘difficult’ but pointed to moderate signs of improvement in sales in what had been a ‘key transition year’.
Full-year revenue growth of 3.6 per cent was driven by its French business, but its UK arm continued to struggle with like-for-like sales growth flat over the year.
B&M blamed a slower start to ‘garden season’ in the UK compared with the previous year, when unusually warm weather drove double-digit like-for-like sales growth.
Jegen added: ‘The past six months has seen us sharpen our pricing, improve on-shelf availability in best-selling brands and revamp our in-store promotions.
‘In the medium term, we continue to see no reason why B&M cannot return to double-digit earnings before interest, taxes, depreciation, and amortisation margins.’
Shares in B&M jumped by nearly 15 per cent as investors breathed a sigh of relief that the profit drop was not as bad as feared.
But they have failed to recover from the 40 per cent fall over the past year, following a series of profit warnings.
Shore Cap analysts pointed to the lack of guidance yet given for the current financial year and the ‘outlook remains uncertain’.
Duncan Ferris, Investment Writer at Freetrade, added: ‘With consumers squeezed and focused on value, it feels like discount retailer B&M should be making hay.
‘ Instead, B&M is struggling with the basics as it grapples with a turnaround plan.’
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