B&M European Value Retail SA (LSE:BME) shares fell 11.4% to 228.3p, around all-time lows, after a trading update for its first quarter showed lower sales than expected.
A 4.4% rise in revenue was reported for the 13 weeks to 28 June, though average selling price deflation impacted trading margins.
UK like-for-like sales were up 1.3%, driven by general merchandise demand during April, aided by favourable weather and Easter timing. Garden, toys and DIY performed well, though deflation in average selling prices weighed on gross margins.
Analysts said UK LFL sales were below expectations, while total sales growth implied a smaller contribution from new space than expected and the unstated impact from Easter may have meant that underlying LFL sales could have been negative in May and June.
New chief executive Tjeerd Jegen, who only started in mid-June, said: “While B&M UK's like-for-like sales are growing, I see a significant opportunity and requirement to sharpen our commercial and operational execution as we move towards and beyond the Golden Quarter.”
He said new ranges will begin to offset margin pressure from the second quarter.
The company’s Ellesmere Port import centre has also started operations, with the relocation of its Middlewich distribution centre set to follow ahead of lease expiry in 2026.
B&M also said it remains on track to complete its redomicile process to Jersey later this year, which will result in its changing from SA to PLC.