Shares in B&M dropped by over 14% in early trading to a record low after the retailer stated that it expects its earnings to drop by 28% in the first half of its financial year.

The discount variety store chain said in its H1 2026 trading update that its EBITDA is set to drop from £274m in the first half of its 2025 financial year to £196m.

It has cited its like-for-like (LFL) sales performance and lower trading gross margins as the drivers for this reduction.

In the first half of its current financial year, the firm’s revenue increased by 4% to £2.79bn, with its UK division recording a revenue jump of 3.5% to almost £2.2bn.

However, UK LFL sales increased by just 0.1%, with LFL volume and value growth in general merchandise being offset by a decline in fast-moving consumer goods (FMCG).

As a result, B&M has launched its ‘Back to B&M Basics’ action plan to improve execution and drive LFL sales in its UK division. This includes adjusting prices on its FMCG key value items, rebooting its managers specials promotions and refocusing its ranges.

The retailer stated that the full impact of these actions will take between 12 to 18 months to take effect.

Chief executive officer at B&M, Tjeerd Jegen, said: "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.”

Head of markets at AJ Bell, Dan Coatsworth, said that although the actions have been put it place, it could take a while for B&M to reap the rewards.

He concluded: "B&M will now offer fewer product lines and clear the shelves of unsold goods which are gathering dust.

"These sound like wise decisions and beg the question why they weren’t made last year as soon as it was apparent that B&M’s problems weren’t a one-off. It’s good to have a plan; unfortunately, the retailer still needs to contend with the present, and trading has got even worse.

"The market is royally disappointed, with the shares hitting a new all-time low on the update. The journey to recovery starts now and it could be a long one."

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