It’s not often you can say B&M European Retail Value (LSE:BME) shares are having a great day. They’ve slumped 41% in value over the last 12 months. Over five years they’re down 64%.
Yet today (Wednesday 3 June), the battered retailer is leading the FTSE 250 higher. At 196.7p, it’s up 15% in mid-week trading following a hugely encouraging full-year update.
Is the recovery now on?
First things first…
Trading numbers for the last financial year (to March 2026) were grim, though earnings did come in a little ahead of forecasts.
Sales were up 3.6% year on year, but the firm had new sites and a stronger performance at B&M France to thank for this. Like-for-like sales across the Channel rose 2.9% over the year.
But significant problems persisted at B&M UK, where like-for-like sales dropped 0.1%. Trouble for its core British operation meant pre-tax profit tanked 47.3%.
Chief executive Tjeerd Jegen described financial 2026 as”
A difficult year that saw profits fall due to a challenging market and execution issues.
He’s not wrong.
Green shoots?
So why have investors piled into B&M shares following today’s release? It seems they’re now beginning to buy into the company’s ‘Back to B&M Basics’ recovery plan launched in October.
Jegen noted that:
The past six months has seen us sharpen our pricing, improve on-shelf availability in best-selling brands and revamp our in-store promotions.
Elsewhere, discontinued lines are being cleared, and the number of products in the fast-moving consumer goods (FMCG) category was slashed.
The result? B&M said that adjusted EBITDA so far this year is “at the midpoint of our current guidance.” Debt is also falling, pulling the firm’s leverage back within its target range of 1–1.5 times.
“This is a solid financial base from which to move forward with our growth plan and enable future shareholder returns,” the retailer commented.
More to come?
The question is, might B&M be at the start of a glorious turnaround?
Analysts at RBC Capital note that”
B&M should benefit from consumers remaining value conscious and should have some runway for growth given it has only 2% share of UK retail overall.
The retailer’s ongoing restructuring plan leaves it in better shape to seize this opportunity too. The next phase will see it trial new store formats, with an online channel and loyalty programmes potentially coming further down the line.
But success is far from guaranteed. B&M’s focus on value hasn’t saved its bacon in recent times, with the cost-of-living crisis hitting almost all retailers. What’s more, competition in the segment is fierce and growing, putting future sales and margins in jeopardy.
Time to buy B&M?
That said, B&M shares are still cheap despite today’s price jump, The forward price-to-earnings (P/E) ratio is just 8.9 times. I want to see more signs of recovery before investing myself. But it might be a great turnaround stock for more adventurous investors to consider.
Should you invest £5,000 in B&M European Value right now?
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Royston Wild does not hold any positions in the companies mentioned.
