The trading update from B&M European Value Retail SA (LSE:BME) showed a better end to a tough year, analysts said, fresh from shares in the discounter sinking to an eight-year low after a profit warning in February.
Sales rose 3.7% in the year to March, broadly in line with City analyst expectations. EBITDA is expected to be above the mid-point of the £605-625 million guidance range, with the consensus forecast sitting at the £615 million mid-point.
The fourth quarter performance was "mixed" said analyst Wayne Brown at Panmure Liberum, with management acknowledging the weakness in FMCG sales and confirming that actions are being implemented to address this.
The shares have been "poor" and with B&M on little leverage, "look very cheap", said Brown on a free cash flow yield of circa 11%.
But he said a return to positive like-for-like sales in the UK was "needed for confidence to change", but he noted that the business faces "easy comps" – ie a softer comparison with last year – for the whole of the current year.
Analyst Adam Cochrane at Deutsche Bank said the update showed a better UK performance in the fourth quarter, with like-for-like sales down 2.4% or around 1.8% on an underlying basis due to a later Easter this year, compared to a 2.8% fall in the third quarter and 3.6% in the first half.
While there was no commentary on the 2026 outlook at this stage, this was "as expected", said Cochrane.
While B&M's shares have increased from March's lows in the past couple of weeks, the Deutsche analyst said the valuation remains a "somewhat depressed" 9x earnings.
"Expectations had increased into the print for a decent 4Q given weather and there should be enough positives here to hold recent gains," he said.