B&M European Value Retail (BME) H1 2026 TU earnings summary

Executive summary

• Group revenue grew 4.0% year-over-year to £2,749m in H1 FY26, driven by UK and France, with new store openings contributing to growth.

• Operational execution issues impacted UK performance, prompting a CEO-led review and launch of the 'Back to B&M Basics' plan to restore like-for-like growth.

• The plan targets improvements in price, promotions, range, and availability, aiming for sustainable UK LFL growth.

• Immediate actions include repricing, benchmarking, SKU reduction, and replenishment process improvements.

• CEO transition and operational review in June 2025 set the stage for strategic changes.

Financial highlights

• Group adjusted EBITDA (pre-IFRS 16) for H1 FY26 expected at approximately £198m, down from £274m in H1 FY25, reflecting cost headwinds and margin pressure.

• H1 revenue: B&M UK £2,196m (+3.5%), France £280m (+13.4%), Heron Foods £273m (-0.9%).

• New Extended Producer Responsibility tax cost £14m in H1; wage cost inflation added £30m.

• Full-year group adjusted EBITDA guidance set at £510m–£560m, with UK LFL sales as the main variable.

• Gross margin in B&M UK pressured by ASP deflation and lower product margins, with some recovery in Q2.

Outlook and guidance

• H2 UK like-for-like sales expected to range from low single-digit decline to low single-digit growth.

• Full impact of operational changes expected in 12–18 months, aiming for sustainable LFL growth and stable profit margins at least at FY26 levels.

• Leverage ratio expected slightly above 1.0–1.5x target at year-end due to lower earnings and seasonal working capital peaks.