B&M European Value Retail SA: Balanced Earnings Call Highlights Growth and Challenges

B&M European Value Retail SA ((GB:BME)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for B&M European Value Retail SA painted a balanced picture of the company’s financial health. While the company celebrated robust revenue growth and resilient profit delivery, it also acknowledged challenges in like-for-like sales and FMCG execution. The overall sentiment was mixed, with positive financial outcomes being tempered by operational hurdles.

Revenue Growth

B&M European Value Retail SA reported a commendable revenue increase, reaching GBP 5.6 billion, marking a 3.7% rise year-on-year. This growth was largely attributed to the opening of new stores across the group, highlighting the company’s expansion strategy.

Resilient Profit Delivery

The company achieved an operating profit measure of group adjusted EBITDA before IFRS 16 of GBP 620 million, which is an increase of GBP 4 million from the previous year. This demonstrates the company’s ability to deliver profits despite market challenges.

Strong Cash Generation

B&M generated over GBP 300 million in cash, which represents about 10% of its current market capitalization. This strong cash flow underscores the company’s financial stability and ability to return value to shareholders.

Strong Return on Capital

The group reported an impressive adjusted return on capital employed of 30.4%, indicating efficient use of capital and strong financial management.

Dividend Increase

A final dividend of 9.7p was proposed, bringing the full-year dividend to 15p per share, a 2% increase compared to 2024. This reflects the company’s commitment to returning value to its shareholders.

Gross Profit Margin Resilience

The gross profit margin saw a slight increase from 37.1% to 37.6% in 2025, showcasing the company’s ability to maintain profitability amidst rising costs.

B&M France Revenue Growth

B&M France contributed an additional GBP 40 million in revenues, highlighting the company’s successful international expansion efforts.

Growth in New Store Openings

The company opened 45 gross new stores, resulting in 36 net new stores in 2025, furthering its footprint and market presence.

Supply Chain Enhancements

A new import center was opened at Ellesmere Port, which is expected to enhance stockholding capacity and improve network efficiency, supporting the company’s growth strategy.

Like-for-Like Sales Decline

Despite overall revenue growth, like-for-like sales decreased by GBP 119 million, a 3.1% decline for the full year, signaling challenges in maintaining existing store performance.

Challenges in FMCG Execution

The company faced negative like-for-like performance in FMCG categories, attributed to in-store execution issues such as space allocation and presentation.

Decline in Heron Foods Performance

Heron Foods saw a decrease in adjusted EBITDA from GBP 35 million to GBP 30 million, driven by lower revenues, indicating a need for strategic adjustments.

Increased Operating Costs

Operating costs rose by 7.2% year-on-year, with B&M U.K. costs increasing by 8% to GBP 1.1 billion, reflecting the impact of inflationary pressures.

Earnings Per Share Decline

Earnings per share fell to 33.5p from 35.9p last year, influenced by depreciation and higher interest rates, affecting shareholder returns.

Negative Impact of External Conditions

Market headwinds, including wet spring weather and the timing of Easter, negatively impacted performance, demonstrating the company’s vulnerability to external factors.

Forward-Looking Guidance

Looking ahead, B&M European Value Retail SA remains optimistic about its growth prospects. The company plans to continue its expansion with 45 new stores in 2026, focusing on supply chain efficiencies and sustainable growth. Despite the challenges, the company aims to maintain its robust financial performance and shareholder value creation.

In conclusion, B&M European Value Retail SA’s earnings call reflected a balanced sentiment, with significant achievements in revenue and profit growth countered by operational challenges. The company’s strategic focus on expansion and efficiency improvements positions it well for future growth, despite the hurdles it faces.