B&M European Value Retail (1K) | Buy | Case largely unchanged

研报英文原文证据摘录

B&M European Value Retail (1K) | Buy | Case largely unchanged

B&M European Value Retail Buy | Target Price: 250p

B&M UK appears to be stabilising

In FY25, B&M launched its Back to B&M Basics plan, aimed at fixing retail execution. It included

fixing prices, range rationalisation, improving availability, and reigniting promotions. Ultimately,

the plan hoped to help the company find its way back to sustainable LFL growth, at the cost of

lower profitability over the period of the model reset.

The charts below show that LFL growth is on a positive trajectory over recent quarters. Q1 FY26

(spring 2025) was particularly strong due to good weather impacting positively the trading in

seasonal categories, and hence was not necessarily reflective of the underlying trend. It also

means that the comparison base will be rather high for Q1 FY27. The two-year LFL stack appears

to have troughed in Q1 FY27 and is on a positive trajectory since, which we expect to continue

into the coming quarters. As evidenced in the right-hand chart, the recovery in the LFL

trajectory has also meant that the margin has trended weaker. We expect the margin to have

bottomed in H2 FY26 and to gradually recover in the coming periods.

Chart 1:B&M UK - LFL growth trajectory is improving... Chart 2:... as margin has narrowed in recent periods

Source: Kepler Cheuvreux Source: Kepler Cheuvreux

At B&M France, the stores continue to generate reliable LFL growth with FY26 LFL growth of

2.9%, compared to 2.6% in FY25. Q2 FY26 was partially supported by a lower comparable base

due to the implementation of a warehouse management system in the previous year. Besides its

reliable LFL growth, B&M France generates a steady margin, slightly above 8%.

Chart 3:B&M France generates sustained LFL growth... Chart 4:...