B&M European Value Retail SA (LSE:BME) shares slipped 9% on Tuesday as analysts said first-quarter results showed the discounter continued to see modest sales of fast-moving consumer goods (FMCG) that investors were hoping for.
UK like-for-like (LFL) sales rose 1.3% in the 13 weeks to 28 June 2025, helped by strong Easter-boosted April trading in general merchandise, though sales slowed in May and June.
General merchandise sales grew despite deflation in average selling prices, but FMCG remained negative on a LFL basis.
Peel Hunt analysts noted that “FMCG continues to be negative, albeit with some more positive signs in cleaning and health & beauty,” while adding that gross margins were lower in Q1 but "should normalise" in the full-year.
Deutsche Bank was more critical, stating: “B&M has managed to disappoint again... The weaker gross margin comments for Q1 is also a small negative surprise.”
The bank added that LFL performance likely turned negative in May and June, despite tailwinds from weather and favourable comparatives.
Shore Capital acknowledged the return to growth but remained cautious: “While it is encouraging to see a return to LFL growth in Q1, we view that more evidence is needed of improving trading before we see a significant re-rating of the stock.”
New CEO Tjeerd Jegen, who started in mid-June, said the results reflect an opportunity to “sharpen commercial and operational execution” ahead of the crucial final months of the year.
France also saw progress, with revenues up 7.6% year-on-year and LFL growth of 1.1%. Heron Foods, however, declined 0.4%.
While the analysts agreed that the shares remain on undemanding valuation multiples, they signalled the need for sustained trading improvements to drive re-rating potential.