B&M European Value Retail SA (LSE:BME) shares fell 4.1% to 195.7p after reporting a mixed first quarter, with strong trading in France and steady growth at Heron Foods but weaker trading in its core UK business.
The discount retailer said revenue rose 2% to £1.43 billion in the 13 weeks to 27 June compared to a year earlier.
Revenue at B&M UK increased 0.3% to £1.14 billion, although like-for-like sales, which measure performance at stores open for at least 14 months, fell 2.3%. The decline was said to reflect a comparison with a stronger start to the garden season last year.
The update was broadly in line with comments made in June, when the company said the 2027 financial year would be a year of investment as it pursued its "Back to B&M Basics" turnaround plan and warned that garden sales had started slowly.
Trading improved through late May as warmer weather boosted demand for seasonal products, with general merchandise like-for-like sales returning to growth in May and June, while seasonal stock levels ended the quarter in line with expectations following successful clearance activity.
France remained the standout performer, with revenue rising 14.6% and like-for-like sales increasing 5.3% as higher customer numbers and new store openings drove growth.
Heron Foods, its food convenience business, also delivered a stronger quarter, with revenue up 2.8% and like-for-like sales rising 2.6%.
Chief executive Tjeerd Jegen said: "Against this backdrop, the like-for-like sales decline at B&M UK was expected, but it was pleasing to see our general merchandise categories return to growth in May and June, and our garden and outdoor inventories ending the season at normal stock levels."
The company said it continued to invest in lower grocery prices in the UK, weighing on fast-moving consumer goods margins, while general merchandise margins improved and are expected to strengthen further as autumn and winter ranges arrive.
Broker Peel Hunt said 2.3% UK LFL decline "is in line with forecasts, following the shape of the weather, up against a huge prior-year comparative from April last year (+10.9%)".
Analysts felt it was a "solid" first quarter.
** UPDATE: Adds share price and broker comments **
