B&M Lowers Profit Forecasts Following UK Sales Decline

B&M has revised its profit forecasts downward after experiencing a decline in UK sales during the critical Christmas quarter. The discount retailer now expects its full-year profits to fall between £440 million and £475 million, down from the previous guidance of £470 million to £520 million. This adjustment reflects ongoing investments aimed at pricing strategies and stock clearance, as the company seeks to stimulate growth over the next 12 to 18 months.

In an update covering the third quarter ending on December 27, 2025, B&M reported a 0.6% decline in like-for-like sales in the UK. The company noted that its efforts to return to “Back to B&M Basics” are part of a strategy to enhance stock management and reduce the SKU count. As B&M stated, “These are investments in the long-term strength of B&M, but they do impact near-term financial performance.”

The retailer is optimistic that the measures taken will help restore sustainable like-for-like growth in its UK operations. B&M highlighted that despite the sales downturn, there was a positive trading trend in December, driven by aggressive price reductions and seasonal product sales.

Heron Foods, a subsidiary of B&M, also reported disappointing financial performance, contributing to the lowered profit guidance. B&M indicated plans to “review and reposition” Heron Foods’ customer offerings to better align with market demands.

Challenges in the Retail Sector

The struggles faced by B&M reflect broader challenges within the British retail sector during the Christmas trading period. The Works, a discount books and crafts chain, reported a 4.2% decline in sales for the same quarter, with online sales halving due to issues with a new delivery provider. Despite these challenges, The Works did see a 1.2% increase in like-for-like store sales over the 11 weeks leading to January 18, 2026.

Meanwhile, Primark experienced a dip in like-for-like sales, although its revenues rose by 1.5% to £3.5 billion, buoyed by price inflation. In contrast, DIY retailer Wickes reported a stronger performance, achieving a 6.3% increase in revenues year-on-year, amounting to £788 million for the six months ending on December 27, 2025.

The overall retail landscape during the holiday season has proven to be challenging, with various companies grappling with fluctuating consumer demand and economic pressures. As B&M and its peers navigate this environment, their strategies will be closely watched by industry stakeholders and analysts alike.