B&M’s shares drop despite hints of turnaround from new CEO
B&M has reported a strong set of results under its new CEO after a tough year and a half marked by supply chain issues.
But its share price still plunged by 13 per cent in early trades, pulled down by concerns about margin pressures like price deflation and cost inflation.
The FTSE 250 company told markets this morning that overall revenue rose 4.4 per cent to £1.4bn in the 13 weeks to June 28.
“The company’s high valuation multiple increases the pressure to deliver on ambitious targets,” Adam Vettese, market analyst for eToro, said.
“Execution risks around margins and the cost base mean the business needs some more consistent performance and show some adaptability for the shares to track meaningfully higher,” Vettese said.
Revenue at B&M’s UK arm rose 4.7 per cent year on year to £1.1bn, while its French arm grew revenue by 7.6 per cent to £136m and Heron Foods’s revenue shrank 0.4 per cent to £138m.
B&M has struggled with supply chain disruptions and wage inflation, with a series of worse-than-expected profit updates causing its share price to halve since December 2024.
Competition in the value sector is brutal, with razor-thin bottom lines made thinner by the recent increases in national insurance contributions and supply-chain costs.
But a series of well-picked new store locations, plus a summer bump from good weather and booming seasonal goods, has been a boon for the company.
Managing director of Label Sessions, Nick Sherrard, said that B&M’s new CEO Tjeerd Jegen now “looks like a lucky general”.
“He is inheriting a business expanding its footprint in the value category, which many analysts expect to be growing too”.
B&M’s new boss beds into the role
Jegen was appointed to the role in May 2025, taking over from interim chief Mike Schmidt.
“My early days spent listening to and learning from our passionate colleagues and customers have underlined for me the strength of our value-focused model, which is more crucial than ever in the current challenging economic climate,” Jegen said.
“While B&M UK’s like-for-like sales are growing, I see a significant opportunity… as we move towards and beyond the Golden Quarter,” he added.
Sherrard said that the next challenge for B&M is to get its new seasonal customers “retirning regularly”.
“To do that B&M needs to be producing a pipeline of new products at the right price points for all seasons and all weathers. The new stores and summer deals won’t solve medium-term issues by themselves.
“Given the disruption facing competitors right now, if B&M embraces that challenge there is every reason to think we could be seeing a real turnaround at the business,” Sherrard said.