B&M European Value Retail SA (LSE:BME) has issued its third profit warning since last summer as the discounter's rejigged board struggles to turn around performance.
The discount retailer now expects adjusted EBITDA for the year to March of £440-475 million, down from previous guidance of £470-520 million, due to investments in pricing, stock clearance of discontinued lines, and the financial underperformance of Heron Foods.
Group revenues for the 13-week period to 27 December 2025 increased 2.9% year-on-year to £1.74 billion.
Like-for-like sales at B&M UK declined 0.6% over the quarter but showed growth of 3.0% in December, supported by strong seasonal sell-through. This compares to flat LFL sales in the first half.
Chief executive Tjeerd Jegen, who started last June, said: "We entered our Golden Quarter sharper on price to reinforce our value proposition with our customers.
"Price investment has continued, particularly in FMCG, and while the full benefits will take time to come through, I am encouraged by the early signs of like-for-like sales growth at B&M UK late in the quarter.
"These are investments in the long-term strength of B&M, but they do impact near-term financial performance."
Revenue at Heron Foods rose 1.4%, though LFL sales were flat and profitability was below expectations. Directors said they are reviewing the Heron customer offer.
B&M France reported total revenue growth of 8.5% and like-for-like growth of 0.4%.
Clearance activity is expected to increase in the fourth quarter as part of efforts to simplify ranges and improve stock availability.
In October, the FTSE 250-listed discount retailer cut its profit guidance and announced the departure of its chief financial officer after an internal review uncovered around £7 million of costs that were not properly recorded earlier in the year due to a systems update.
This came only days after the first profit warning of Jegen's reign, as UK sales fell in the second quarter and margins came under pressure from increased wage costs.